"We
intensely analyze the Gold & Silver
market, and we think both will hit new
highs at the end of the year or early
next year. The shocking thing to me
is, obviously, most governments now
have put into place legislation or rules
in their banking systems for bail-ins.
The fact that all these countries are
doing this means [it is] going to happen.
That is the ultimate win for precious
metals. God knows what the price would
be if it turns some of those depositors
into people who need to own Gold &
Silver. Somebody is going to fail here.
All the data I look at says the Western
central banks [which] have been selling
gold, are running on fumes now. It is
very close at hand." ~ Eric Sprott

"With
regard to the Indian Government's campaign
to curtail gold buying by the Indian
public, India is as democratic a country as any and the
problem is rooted in the preferences
of the people. This is like trying to
stop Americans from watching football." ~ John Brimelow

"Large investors who are keeping their
gold in the COMEX, especially in JPMorgan's
vault, now understand how corrupted
the physical market is, especially at
the COMEX. There is a motivated run
on the gold JPM is holding in its Eligible
account by investors who want to make
sure they get their bars. In other words,
we may be seeing final stages leading
up to an eventual COMEX default. It
might not be an outright default. They
may juggle the balls, so to speak, in
order to give the illusion that there
was not a default. But we think the
COMEX may be on its last legs." ~ Dave in Denver

"Many
investors have incompatible goals and
perspectives. The COMEX will shut down
as an empty room, if the official corrupt
Gold price is forced lower, since devoid
of inventory and clients. The lack of
inventory demands another price ambush.
The COMEX must be shut down in order
to permit a fair Gold market to emerge
as dominant. My forecast call for over
two years has been that the official
Gold price goes dark, with only scattered
global prices quotes appearing, a full
requisite step in the market's discredit
process. The benefits come to the other
side since those quotes will emerge
from the new fair equitable decentralized
market." ~ the Jackass

"I
don't know why one just doesn't trade
gold for the Friday fall. It is so predictable,
it has become comical." ~ Marshall Auerbach (referring to
illicit big bank paper market whacks
on Fridays when low volumes make it
vulnerable)

"Demand
is unprecedented. We are buying all
the coin blanks they can make." ~ Richard Peterson (acting Director of the USMint)

##
INTRO GOLDEN NUGGETS

◄$$$ ON JUNE 15TH OF 1933 THE INFAMOUS USGOVT CONFISCATION OF PRIVATE
GOLD WAS CONDUCTED BY PRESIDENT FRANKLIN
ROOSEVELT. THE JACKASS HOPES THE USGOVT
TRIES THE STUNT AGAIN. IT WOULD REVEAL
THE VALUE OF GOLD, ITS SAVIOR ROLE BY
THE BANKING SYSTEM. THE EFFORT COULD
BRING DOWN THE USGOVT FINANCIAL SECTOR.
$$$

Franklin Delano Roosevelt was a man of average intellect, weak spine, deceptive
word, and vastly over-rated legacy.
Apart from his very unimpressed war
record (pre-war Pearl Harbor, post-war
Yalta Conference), Roosevelt
enjoyed broad bipartisan support for
inflationary policies in Congress. The
nation was desperate. After 101 days
in office, he ordered the surprise confiscation
of private holdings in gold coins, bullion,
and certificates.Roosevelt called the measure a temporary maneuver to restore national
solvency, but he lied. He followed up
the seizure by invalidating gold clauses
in private contracts that obligated
payment in gold dollars, which resulted
in a sweeping paper asset devaluation
for bond assets and related contract
holders. The USGovt under FDR betrayed
citizens who had purchased gold as a
hedge against the inflationary boom
of the 1920s, called by literary
icons the Roaring Twenties. Some crafty
Americans stored their gold successfully
in Canada.
It was just the asset inflation insanity
of that era. Another meddlesome practice
of the FDR Admin was its frequent intrusive
interventions in wages and prices (without
precedent) which caused a normal stock
market correction to evolve into a depression.

By January 1934, just six months later, Roosevelt
increased the dollar price of gold by
order from $20.67 to $35.0 per ounce.
The fiat order in effect devalued the
USDollar by 70% while increasing the
value of Gold held from the seizures. The banking system was restored,
on the back of citizen wealth, a massive
organized theft. Roosevelt's
popular programs created the foundation
for socialism (the monster that continues
to grow), not exactly a great item on
his career record either. His infrastructure
programs were very constructive though,
as they permitted the USEconomy to enjoy
enormous growth. Any attempt by the
USGovt to confiscate gold again from
private citizens will erupt into a grand
firestorm, even rebellion. If it is
attempted out of desperation, the move
would breathe vigorous life into the
Gold price to create a dragon. People
would suddenly switch lanes, and comprehend
that gold is the answer to the national
insolvency that grips banks, households,
businesses, and the government itself.

◄$$$ BULLION BANK OPERATORS COULD BE SHUT DOWN FROM LACK OF INSURANCE.
THEIR INSURANCE FIRMS ARE ASKING TOUGH
QUESTIONS. IF THEY LOSE INSURANCE, THEY
WILL NOT BE ABLE TO CONTINUE. $$$

Amidst all the hubbub and publicity over Allocated Gold Account fraud, a minor
element to the business equation has
been ignored. The issue arose a few
years ago when Morgan Stanley faced
lawsuit pressures over gold vault charges
for gold bars long before leased and
sold. Service fees for stored non-existent
gold bars is fraud. Likewise, the criminal
activity of bullion banks has crossed
the insurance contracts. Insuring
gold that is gone complicates the details
in verification of insurance contracts.
Imagine insuring a Mercedes in a garage
where it was stolen months earlier.
Furthermore, the insurance companies
might be on the verge of doubling their
policy premium costs to the bullion
banks, since they smell fraud themselves.
They are not stupid. With some legally
enabled inspections and audits, they
can determine the missing gold amounts.
They follow up by calculating the value
of missing gold bars in the $billions,
then amplify the losses by estimated
lawsuit awards. The biggest hidden problem
for bullion banks is not redemption,
but insurance. Without it, they shut
down.

◄$$$ THE TORONTO STOCK MARKET WILL SELL GOLD & SILVER. A PLOY IS LIKELY.
THE CANADIAN MINE OUTPUT FACES A DIVERSION
FROM THE PRIVATE GOLD DEMAND. A PHONY
SCAM IS AT WORK, SINCE THE CANADIAN
GOVT HAS NO GOLD RESERVES. THE ORIGIN
OF THE SUSPICIOUS VEHICLE IS TIMED WITH
THE REVELATION OF LOST GOLD AT THEIR
MINT, PROBABLY DUE TO DISCOVERY OF SALTED
TUNGSTEN BARS (FAKE GOLD). $$$

The Canadian Govt has begun to sell Gold & Silver on the Toronto
stock market, just another paper scam.
The Royal Canadian Mint has issued two
Exchange Traded Receipts, one representing
a weight of gold, the other a weight
of silver. They will therefore mimic
an Exchange Traded Fund. The two vehicles
curiously trade for less than the market
value of the precious metals they represent.
The giveaway on the con is the stark
evidence that Canadian Govt reserves
are empty of gold, long ago played for
benefit to the Wall Street crooks to
curry favor. See the Globe & Mail
article (CLICK HERE).

Rob Kirby filled in some blanks, critical neglected items. The Exhange Traded
Receipts were created by the Royal Canadian
Mint in the aftermath of their losing
C$15 million worth of gold back in 2009.
The timing was exact. At the time, they
suddenly found no working stock to feed
their robust Maple coin program at the
mint. The lost gold was attributed to
lost floor scraps at the foundry, an
absurd story. The number of ounces
at the time equated to forty separate
400-oz bars, by coincidence the exact
number of bars that are routinely melted
to do a run of feedstock Gold Canadian
Maple coins. Kirby is confident
that the RCMint tried to melt borrowed
tungsten-salted (fake gold) bars they
unknowingly stored for a third party.
They were forced to write off the loss,
when the tungsten bars did not melt
properly. Tungsten requires an order
of magnitude higher melting temperature
than gold.

Kirby said, "The RCM had to borrow third party gold in situ, because
Canada had sold all 660 metric
tonnes of their sovereign reserves during
the late 1980s and early 1990s. It was
pretty much in the immediate aftermath
of this reported loss that the RCM established
their ETReceipt [ploy] to ensure that
going forward, they always had adequate
working stock of Gold & Silver bullion
to continue manufacture of both Gold
and Silver Maples. Do not believe in
coincidences, as there are too many
associated with this story. Therefore,
betting on the RCM and their gold or
silver ETRs might come with some dubious
risk." He recommends instead
the Sprott or CEF funds, which he assures
have real bullion without question.

◄$$$ US-MONEY GROWTH CONTINUES TO RISE AT A TORRID PACE. IT IS TOTALLY
OUT OF CONTROL. THE SPURTS COINCIDE
WITH HIGH VOLUME BOND PURCHASE AND REDEMPTION
PROGRAMS. MONEY GROWTH EXCEEDS A 40%
ANNUAL PACE. $$$

Monetary solutions never repair structural damage, especially
with deep systemic insolvency. Notice the quantum leaps upward in
the adjusted monetary aggregate. The
2008-2009 spurt was in response to the
Lehman Brother killjob collapse. The
2011 spurt was with the introduction
of QE bond purchases by the USFed. The
2013 spurt in progress is QE3 without
limits (aka QE to Infinity). Desperation
is setting in. The USFed reaction
to a faint false response by the USEconomy
is to ramp up the volume of money growth,
and more dangerously, to talk about
the tapering of the QE bond purchase
programs with a gradual rise in interest
rates. They are liars. They will
continue to ramp up bond monetization
when foreign channels accelerate in
volume the USTBonds returned to sender
as toxic swill in redemption. Expect
a frightening rise by next year, when
foreign channels redeem USTBonds and
the USFed will be compelled to cash
them in for whatever currency is demanded,
or else face a monster rise in the long-term
USTreasury Bond yields. The other consequence
of the foreign redemption channel stuffing
will be an unwanted massive expansion
of the USFed balance sheet, precisely
when they will be talking about its
reduction.

Some money supply data points are provided by the St Louis Fed. With $3.173
trillion on May 29th, against $2.986
on April 4th, the growth of $187 billion
in eight weeks resulted in a 40.7% annual
growth rate. Growth in money supply
should be locked in stride with USEconomic
growth. It was until 1996, when Greenspan
changed the rules and opened the floodgates
to asset bubbles and their consequent
ruin.

◄$$$ SERIOUS INFLATION HAS BECOME ENTRENCHED IN VENEZUELA,
FOLLOWING TWO LARGE DOSES OF CURRENCY
DEVALUATION IN THE LAST FEW MONTHS.

The Central Bank of Venezuela has reported an
inflation rate for May of 6.9%, equivalent
to an annualized compounded rate of
around 100%. It would be a stretch to
claim the nation is on the verge of
a hyper-inflation episode. However,
if more currency devaluation befalls
the Bolivar currency, then such an episode
could occur. The nation is in the midst
of a harsh adjustment to account for
almost two decades of currency controls.
Be on watch for another quantum drop
in the currency. The Jackass forecast
is for another devaluation to the Bolivar
currency, to come in 2014 when it is
clear that the new Venezuelan Govt has
continued the Chavez policies, not reformed
them. See the Economic Monitor article
(CLICK HERE).

◄$$$ THE EURASIAN TRADE ZONE CONTINUES APACE WITH PROGRESS. THE EASTERN
POWERS WILL PUSH THE ENVELOPE. THE WEST
CONTINUES TO BE LOCKED OUT, ITS ROLE
HAVING CHANGED TO DISRUPT PROGRESS RATHER
THAN TO JOIN IT. MANY ARE THE PIPELINES
AND NATIONS AS PIECES AND PLAYERS. ANOTHER
EURASIAN TRADE ZONE BUILDING BLOCK IS
BEING CONSTRUCTED IN BELARUS. SIMILAR ENTERPRISE
EFFORTS ARE OCCURRING IN GREECE. $$$

For an excellent review of the plans, progress, and development of the New Silk
Road, see the Asian Times article (CLICK
HERE)
by Pepe Escobar. He colorfully describes
the evolution of the Eastern Hemisphere,
with all its progress, uniting efforts
by the various nations, and the obstruction
presented by the West, led by the United States. He calls the many new pipelines
the odd moniker of Pipelineistan. Their
development explains a motive why Syria
might be in the process of being destroyed.
The Jackass has given the natural gas
pipeline going from Iran
to Syria
the name Shiite Pipeline, thus the target
for its derailing. The most significant
partnership is clearly between Russia
& China,
the axis for the Eurasian Trade Zone
itself. Volumes could be filled with
the progress, developments, and events
behind the Eurasian build-out. This
brief story is a summary of miniscule
length.

Some key turning points are in progress of development. The New Economic Axis
is being built, which could eventually
place the Euro currency over the USDollar.
A significant strategic economic and
political development is at work, not
covered in the least by the Western
press, probably since it is terminally
negative to the USDollar. The latest
odd event is taking place in the Western
suburb of the Former Soviet Union. China
is building an entire city in the forests
near the Belarusian capital of Minsk. Its design is to create a manufacturing
site for exploit between the European
Union and Russia. The area is 40%
larger than Manhattan,
located around the Minsk
international airport. Overall the project
calls for $5 billion in development,
which will include enough housing to
accommodate 155 thousand people, according
to Chinese and Belarusian officials.
The small Belarus Economy has a $60
billion GDP, but has required a $6.5
billion in bailouts from the Intl Monetary
Fund and Russia
since 2009. The hub will put Chinese
exporters within 170 miles of EU members
Poland and Lithuania
and give them tax-free entry into Russia
and Kazakhstan,
which share a customs union. The local
Belarus
population is 99.6% literate but with
half the wages of Poland. The industrial park
is unique in Europe.
See the Bloomberg article (CLICK HERE).
Be sure to know that China
is also building a city of industry
in Idaho, in the
Western United
States.

◄$$$ LLOYDS WILL CLOSE ITS DUBAI PRIVATE BANKING BUSINESS. BANK BUSTS
ARE HAPPENING ALL OVER, BUT MOST VISIBLY
IN AN UNUSUAL PLACE. UNITED ARAB EMIRATES
IS SEEING A MASSIVE WAVE OF BANK EXECUTIVE
RESIGNATIONS. THE WAVE HAS REACHED THE
SAUDIS, THE BRITISH, AND SPANISH BANKS
ALSO, EVEN AUSTRIA.
$$$

Lloyds of London will shut down its private banking business in Dubai.
See the Arabian Business article (CLICK
HERE).
They are not alone. The British and
Americans are not very popular in the
Middle East after a full generation
of brutal dominance and support for
a common Arab enemy, the staunch US
ally in the Middle East that controls
most US foreign policy with hidden strings. A mass
of multiple bank executives have departed
from UAE banks in the fastest pace seen
in modern times. The writing is
on the wall, time to go. The Jackass
belief is that the House of Saud is
soon to fall, and bankers sense the
growing risk and danger to the entire
Gulf region. Within a short period of
time, numerous bank CEOs and senior
executives have resigned in the UAE.
The unusual factoid is that many had
been in their positions for only a short
tenure, but have left suddenly. It is
a low pressure zone. In March, the head
of Mideast and Africa operations based
in Dubai resigned
at Royal Bank of Scotland.
In April, a skein of departures. NBAD
lost their veteran CEO Michael Tomalin
after 14 years of service. He will continue
as non-executive director to support
the transition to the new CEO, who will
come from ANZ Bank. Ajman Bank lost
its CEO in January 2012 but the acting
CEO suddenly quit. The largest bank
from UAE, EmiratesNBD lost its CEO after
seven years at the post. The month of
May saw more departures. ADIB lost its
CEO Stuart Crocker of Private Bank,
who had just joined the firm in 2012.
Barclays lost its top Middle
East banker. The CEO-elect at RAK Bank
resigned after coming from Lloyds Bank,
a stay of only 45 days.

The phenomenon (like missing bee population) is also occurring in many other
countries such as Spain, the United
Kingdom, Saudi
Arabia, and Austria,
among other countries. In Austria, Raiffeisen
Bank Intl CEO Herbert Stepic resigned
in the wake of damaging publicity over
his personal property deals. In Saudi,
the top JPMorgan banker who was heading
the Regional Corporate Bank left. In
Spain,
the Santander CEO quit, due to past
criminal conviction. At Barclays in
London City, both
the head of Private bank and the Head
of Investment Bank quit on the same
day in April. In Cyprus,
plenty of damage to executive ranks.
The largest bank on the copper isle,
Bank of Cyprus lost its CEO and also
lost its Chairman, two people. The entire
Laiki Bank (aka Popular Bank), the second
largest on Cyprus, was rendered insolvent and shut down.
All accounts in excess of EUR 100 thousand
were confiscated, lost, stolen, seized.
The CEO and entire staff were dismissed,
the total jobs lost near 9000. The
Jackass suspects bankers are on the
run, fully aware that international
police are conducting investigations
in depth with enforcement power, from
a new sheriff in town. This view
is independent of events on Cyprus, and very much connected to the forcible
removal of 6000 tons from London
banks in the spring and summer months
of 2012, taken to satisfy margin calls
to secure Eastern locations. Add to
these factors the instability of the
Persian Gulf, centered in the eventual fall of the House of Saud.

◄$$$ WORD SLOWLY COMING OUT THAT SAUDI KING ABDULLAH IS CLINICALLY DEAD.
INTERNALLY, THE KINGDOM IS IN DISARRAY.
THE STABILITY OF THE DESERT REALM IS
GONE WITH A FART IN THE DESERT. SUCCESSION
IN SAUDI
ARABIA IS IN PROGRESS
BUT FROM A CLUMSY SECRETIVE SEQUENCE.
THE INSTABILITY SHOULD LEAD TO THE DISCARD
OF THE PETRO-DOLLAR, FROM FAILURE TO
HOLD TOGETHER THE GROUPS IN CONFLICT
LIKE REFORMERS AND THOSE WHO WISH NO
MORE TIES WITH AMERICAN (INFIDEL) INTERESTS.
$$$

Finally reports are being disseminated from credible local channels that Saudi Arabia's King Abdullah bin Abdulaziz is
clinically dead. The monarch has not
been seen in public for a couple months.
Earlier in 2013, the Hat Trick Letter
reported that King Abdullah had not
emerged from back surgery and its anesthesia.
A Saudi journalist working for London-based
Asharq Alawsat claimed the king was
clinically dead. He quoted medical sources
in Saudi Arabia as saying that the king's vital organs,
including his heart, kidneys, and lungs,
have stopped functioning. Sustained
by a defibrillator and ventilator, he
hangs on sadly. Abdullah is a smart
honorable devoted man. The Royal Court has yet to comment on the report of King's death. They
probably will only when they decide
which among the unimpressive insecure
gang of inbred poorly educated weakling
gnomes will succeed to the throne. Be
skeptical that the crown prince is the
lock to the throne. See the Al Monitor
article (CLICK HERE)
and the PressTV article (CLICK HERE).
With Abdullah will go the nation's stability.
Within a minimum of 12 months, and a
maximum of 2 years, expect the fall
of the House of Saud. With it will go
the crucial Petro-Dollar defacto standard.
The lost USDollar foundation will usher
in the new age of Gold.

◄$$$ COPPER WITHDRAWAL ORDERS FROM LONDON
METALS EXCHANGE HAVE SOARED TO A RECORD.
THE CHINESE COPPER FINANCING DEAL IS
COMING TO AN ABRUPT END, COMPLETE WITH
METAL SHORTAGE. $$$

A significant story is emerging in the metals market, not in Gold or Silver,
but rather in copper. Bloomberg chose
to apply deceptive spin by claiming
the fast falling copper inventory at
the London Metals Exchange is evidence
of improving global demand. Bull cookies
and poppycock, rubbish and bullocks
too. An unprecedented rise in orders
to withdraw copper has a suspicious
hand from China, as part of its own strange copper deal.
The huge demand bias from Asia
suggests far more is at play than economic
resurgence. Point the finger at the
collapse in the Chinese Copper Financing
Deal (CFFD), a funding system based
upon rehypothecation. It featured obscure
unlimited collateral capacity tied to
funding chains. An inadequate amount
of copper in bonded warehouses exists
to meet the Letter of Credit needs,
once the copper warrants start being
demanded. Some analysts believe the
surge in LME delivery requests reflects
a desperate demand for physical copper
for to meet these unwinding spurious
funding deals. Recall that just before
the mid-April orchestrated illicit gold
market crash, the copper vaults had
gone almost empty. See the Zero Hedge
article (CLICK HERE).
Expect a copper market default or a
staged futures contract naked short
ambush, the all too common paper attack.
Given the broad need for copper (cars,
homes, electronics), a paper ambush
will probably be impossible.

◄$$$ THE CHINESE WILL BE WORKING ON ANOTHER CENTRAL
AMERICAN CANAL
THAT LINKS THE TWO MAJOR OCEANS. THE
STORY IS THAT NICARAGUA
IN THE NEXT DECADE WILL JOIN PANAMA
IN CANAL SERVICE BETWEEN THE TWO GREAT
OCEANS. BOTH WOULD BE UNDER CHINESE
CONTROL. EXPECT A LESS THAN EASY ENGINEERING
FEASIBILITY REPORT ON THE PROJECT, DUE
TO LONGER DISTANCE AND NO RAIN FOREST
WATER SUPPLY. $$$

As a resident of Central America for 6-1/2 year, the Jackass
offers an informed interpretation of
the potential second canal story. Two
visits to the Panama Canal in recent
years, including the fascinating Canal
Museum, and
additional reading have given a solid
perspective. The Panama
Canal took many years and cost many
lives to construct. It spans a very
narrow isthmus stretching 48 miles (=77km)
between the Pacific and Atlantic Oceans. Part of the span is helped
by Lake
Miraflores,
whose three mile length reduced the
construction effort.

Nicaragua has awarded a Chinese company a 100-year concession
to build an alternative to the Panama Canal. Its completion would surely have profound geopolitical
ramifications. However, not so fast.
The other canal in Nicaragua would be much more
difficult to construct for two big reasons.
The first is simple distance. The Pacific
leg would be about 12 miles (=18km)
to connect to Lake Nicaragua. The Atlantic leg would be about 60 miles (=100km) to
connect through the plains to the east.
The total distance would be about 72
miles, a 50% longer span than Panama. The second is weather. A key ingredient
to the lock system in Panama is the rain forest contribution, a natural
supply to the network. Nicaragua is NOT a rain forest, but rather a very
hot plain with a few volcanos that seem
out of place. It is hot as hell, sunny
on 90% of days, and not very humid.
The Jackass loves the sunny hot weather,
often scorching hot, a welcome break
from the seven straight rainy season
months of Costa
Rica. Rain is not
a regular feature in the plains of Nicaragua. But the lake at certain times of the
year has swarms of flying insects so
heavy that they are mistaken for clouds.
They once found my nostrils in large
numbers. See the UK Guardian article
(CLICK HERE).

Not so fast on this new ambitious project. The shortest route is shown with
the thick black lines on the map. The
Chinese have covered their bets well,
having pledged this month a hefty $500
million to upgrade all of Costa Rica's
port facilities, with their own imported
Chinese chain gang labor. Besides, the
Chinese already control the Panama Canal with a CISCO contract. My guess is by the end of 2014,
nothing will have been done for the
Nicaraguan Canal, after the engineering feasibility
study is completed.

##
CHINESE YUAN MATURITY PROCESS

◄$$$ MOBIUS OF FRANKLIN TEMPLETON EXPECTS A GOLD-BACKED ASIAN CURRENCY
TO BE LAUNCHED. OF COURSE! $$$

The Boom Bust Blog included a ripe email. A reference was made to the BBBlog
having cited Philippa Malmgren, who
claimed the Chinese might back their
currency with gold. The reader had a
chance to speak with Mark Mobius from
Franklin Templeton Investments. He mentioned
during a presentation that people in
Asia had been guying
gold like crazy, after the gold price
fell in April. He talked about dealers
in India
being sold out. He cited colleagues
from Turkey
who saw sales in Turkey
of massive amounts of gold coins as
well, done at big premiums to the spot
price. It suggests a decoupling of the
price of physical gold from the spot
price on COMEX. On the matter of the
Chinese backing their currency with
gold, Mobius was directly asked after
the presentation, "Do you
believe we will see an Asian nation
back their currency with Gold?"
His answer was "Yes,
of course." Then the follow-up
question, "Do you think we
will see a return to the Gold Standard?"
His answer was, "Yes, we
should." Mobius is extremely
knowledeable about Asian economies in
Asia. See the Boom
Bust Blog account (CLICK HERE).

◄$$$ MAJOR INSIDER CLAIMS IT IS TIME TO BUY GOLD, SINCE THE CHINESE WANT
TO GIVE THE YUAN CURRENCY A GOLD BACKING.
AN INDICATION IS GIVEN OF A COORDINATED
GOLD PRICE SUPPRESSION. $$$

Philippa Malmgren is an veritable insider. She was Special Assistant to the
President for Economic Policy on the
National Economic Council in the United
States Govt. She was also a member of
the President's Working Group on Financial
Markets (aka the Plunge Protection Team).
Her client list includes every elite
corporate firm in the world. In her
recent commentary on Gold, she implies
a conspiracy underway to push the gold
price down. See the Economic Policy
Journal article (CLICK HERE).

◄$$$ A GOLD-BACKED CHINA YUAN IS TO ARRIVE SHORTLY.
THE FULLY CONVERTIBLE YUAN IS NECESSARY,
STEPS TAKEN EVERY MONTH. GOLD ACCUMULATION
IS REQUIRED, SURELY HIDDEN FROM VIEW.
THE MANY YUAN SWAP FACILITIES IN PLACE WILL AID THE CONVERSION PROCESS IN TRADE. THE UNITED
STATES WILL SOON LOSE THE GLOBAL RESERVE
CURRENCY STATUS FOR THE USDOLLAR. THE
IMPACT WILL BE ON PRICE INFLATION INSIDE
THE USECONOMY, AND RETURNED USTREASURY
BONDS FROM FOREIGN BANKING SYSTEMS.
THE USTBOND WILL NO LONGER BE BROADLY
USED IN BANKING RESERVE SYSTEMS. A SHOCK
WAVE WILL HIT THE AMERICAN
SHORES, RESULTING IN GREAT DISRUPTIONS, AS CHINA ASSUMES THE LEAD GLOBAL
ROLE. $$$

China is making all the required moves
to convert to a gold-backed Yuan currency.
It will change the world of finance
and banking. It will disrupt the sovereign
bond markets, rendering them exposed
congames that support tainted fiat paper
currency. The USDollar is in deep danger
of being replaced as the primary reserve
currency used globally.China is no longer content with a seat at the
table, or worse, a chair in the hallway
outside the conference room. Indications
are clear that China
actually plans to replace the United
States as the dominant
economic world power. In fact, China
already accounts for more global trade
than the United States does. The world is slowly preparing
for a gold-backed Yuan currency, or
at least the Eastern nations are making
preparations. The result will be disruptions
to the East but some degree of catastrophe
to the West. China is in the cat bird seat. They hold roughly
$1 trillion in USGovt debt. They use
the USDollar in international trade
more than any nation except the United States. Until now, China has been compelled
to use the USDollar in international
trade for lack of an attractive alternative.
But a Gold-backed Yuan would change
all of that very rapidly. Afterwards,
the global banking systems would review
their USTreasury Bond emphasis in reserves
management, then diversify out of them.
Yet another channel to discharge USTBonds.

Motive and support are fast arriving for more Yuan usage in global trade. Beijing leaders pursue respect as well as power, and Yuan adoption
is more than just about economics. They
are working toward its full convertibility
and internationalization by year 2015.
Expect it to arrive sooner, born of
crisis. John McCormick of Royal Bank
of Scotland stated, "Financial crises in the
US
and Europe mean
the world needs a new more stable global
reserve currency. Trade in RMB (renminbi=yuan)
is growing rapidly. In the FX market,
for example, our figures show that volumes
are now worth around USD 5 to 6 billion
daily, double what they were a year
ago. China's new leadership faces
a number of problems. The country's
economy is slowing and, although we
would expect the rate of GDP growth
to pick up a little, it is unlikely
to be a steep rebound. But promoting
RMB as a global reserve currency, with
all the economic benefits that will
bring in addition to exerting more political
influence on the global stage, clearly
remains high on their agenda."

The Wall Street Journal recently discussed how Beijing
is undertaking a long gradual campaign
to establish the Yuan as a more market
oriented, international currency. Their
State Council (cabinet) reiterated the
plan to make the Yuan currency fully
convertible. The Western media comments
not at all on the convertibility of
the Chinese Yuan, which is a very important
step. Until recently, the Yuan was only
directly convertible into USDollars
and JapYen. Changes come quickly. Just
this year, the Chinese Govt has entered
into currency convertibility agreements
with Australia
and New
Zealand. The
numerous Yuan Swap Facility devices
are a precursor to direct convertibility,
currently in force with at least a dozen
other nations including England,
Russia, and Singapore. The nation France is working
to secure the swap facility also.

These nations no longer blindly favor the USDollar. The US
has lost its leadership, following crises
and corruption. The Western central
banks strain to maintain credibility.
The USDollar is soon to be cut out of
the trade settlement process in a sequence
of steps that the majority of Americans
and analysts ignore. The adoption of
Gold-backing for the Yuan currency would
push the process into overdrive, resulting
in the replacement of the USDollar as
the global reserve currency. Persistent
rumors point to China busily preparing for
a Gold-backed Yuan in its foundation.
Their gold reserves are five to ten
times larger than reported officially.
Implications to banking reserves management
are immediate, as diversification out
of USTBonds would follow rapidly from
expedience and avoided reserve losses.
With little trade settled in USD, the
banks of the world would not require
their USTBonds to serve as foundation
reserves. Ergo. sell USTBonds!

The Economic Policy Journal recently reported that Pippa Malmgren claims China plans to convert the Yuan into a hard gold-backed
currency, in her words. She is the President
and founder of Principalis Asset Mgmt.
She once worked in the White House in
the Bush II Admin. In the new era
of rapidly depreciating sovereign bond
foundations to paper currencies, the
conversion would mark a distinct competitive
edge and cause a rapid Paradigm Shift.
The Chinese have set themselves apart
as the biggest buyers of gold, mainly
off-market. They acquired the majority
of the 6000 metric tons extracted by
coercion from London last summer. China also imported over 223 tons of gold in the
month of March, through the Hong
Kong window. That is an extraordinary
number, but is eclipsed by other non-standard
avenues. Overall, Chinese imports of
gold from Hong
Kong tripled in 2012, and the final
number for 2013 will vastly overwhelm
what was seen in 2012. Something big
is brewing, and the West is asleep before
the financial section of the newspaper,
focused instead on US stocks and US
sports. The massive gold hoarding by
Chinese leaders is prelude to substantially
raising the international influence
of the Yuan. The USDollar is soon to
be isolated, rejected, and devalued.

As the clock speeds up, China could soon be the largest
gold holder in the world, at between
7000 and 10,000 metric tons. They are
probably superceded only by Russia,
where the Kremlin stores a gigantic
supply likely two to three times greater
than Fort
Knox ever held before its pilferage. My source indicates that Russia
owns over 20,000 tons of gold bullion,
safely stored under the Kremlin in cavernous
vaults. China
is only one or two moves away from checkmate
of the USDollar, with Russia kibbitzing. Their hands
are moving on the chessboard. Putin
is a master chess player. As footnote,
recall that China is the biggest gold mine producer in the
world.

If China finalizes the Gold-backed Yuan currency, and no longer uses the USDollar
in international trade, the world will
follow, starting with major Eastern
nations (likely including Japan), and
later major European nations (likely
starting with Germany). The result will
have devastating effects on the USEconomy.
The exchange rate for the USDollar would
fall hard. The demand for USGovt debt
would vanish, already just a mere trickle,
obscured by the heavy USFed monetized
demand. The impact would translate
to sudden US-based price inflation from
import channels applied to finished
products and commodities both, as well
as supply shortages. The entire
American way of life would be transformed
to Third World
standards, as the Jackass has forecasted
for over four full years. The advantage
of the USDollar being the primary world
reserve currency has been a primary
advantage, soon lost. No longer will
the US be able to import everything inexpensively.
The loss of world reserve status
means a massive tsunami of currency
in the form of USTreasury Bonds coming
back to the US shores for redemption. The adjustment in
the US
standard of living will (not would)
cause economic disorder and social chaos.
Few realize that the majority of USDollar
currency is actually used outside of
the United
States. The catastrophe
awaits. See the Economic Collapse article
(CLICK HERE).

◄$$$ THE CHINESE CONTINUE WITH STRONG GOLD IMPORTS FROM HONG
KONG. THE SURGE IN MARCH WAS UNUSUAL.
THE FLOW CONTINUES APACE, EACH MONTH
EXCEEDING THE SAME MONTH A YEAR AGO.
RECORD VOLUMES ARE BEING SET. $$$

Chinese mainland buyers in March purchased 126,135 kilograms of gold from Hong
Kong, including scrap, compared with
223,519 kilograms. Net imports after
deducting flows from China
into Hong Kong were 75,891 kilograms, versus 130,038 kilograms a month earlier.
Despite being lower than the March total,
the April volume of imports at 126.1
tons was the second highest ever, certainly
greater than April 2012, a fact missed
by the tilted Western press. No slump
here, just a more relaxed heavy consumption.
See the Zero Hedge article (CLICK HERE).

◄$$$ THE BANK OF FRANCE IS SEEKING A YUAN LIQUIDITY
AGREEMENT FOR THE EUROZONE. THE FACILITY
COULD BE MORE BROAD THAN A SIMPLE YUAN
SWAP FACILITY FOR USAGE BY NUMEROUS
CENTRAL BANKS IN EUROPE. IT IS CALLED FULL LIQUIDITY SUPPORT. PARIS WANTS TO COMPETE IN THE FINANCIAL SECTOR,
AND NOT BE LEFT OUT. $$$

The Bank of France Governor Christian
Noyer announced the nation is seeking
agreement among EuzoZone central banks
for ways of providing broad liquidity
support in Chinese Yuan currency. They
wish to compete for future business
against both London,
Zurich, and Hong
Kong banks. Noyer said, "The
essential thing is liquidity backstops,
either public or private ones. On the
public facility, we are looking at it.
We are talking about how we can have
a public backstop with a swap accord
in the Euro system. We have been working
with the Hong Kong authorities, the Chinese banks. The system is now being put
in place. The Chinese banks are very
interested and the big international
banks too."

Paris must compete as the ugly little sister against London and
Zurich to become
any reasonably contending player in
Yuan trading in Europe.
The trade winds have China
elevating its currency for more wide
usage across the world. A swap arrangement
would allow central banks to supply
Yuan funds to commercial banks, whose
customers require the currency. The
Bank of England announced in February
that it planned to sign a deal soon
on a three-year currency swap arrangement.
See the Bloomberg article (CLICK HERE).

◄$$$ THE KIWI DOLLAR AND CHINESE YUAN HAVE STRENGTHENED TIES. THE DIRECT
CONVERSION IS MORE THAN A SWAP FACILITY.
THEIR BILATERAL TRADE WILL BE SETTLED
IN YUAN DIRECTLY, RESULTING IN LOWER
TRADE COSTS, AND BETTER OVERHEAD RISK
MANAGEMENT. MORE GRIST FOR THE USDOLLAR
MILL OF PHASE-OUT DEMISE. AMAZINGLY,
NEW ZEALAND
HAS MORE TRADE WITH CHINA
THAN WITH AUSTRALIA.
$$$

In late May, New Zealand and China were in talks to make their currencies directly
convertible. The benefit of reduced
costs is immediate, while trade between
the two countries is targeted to surge
33% in the next two years. The negotiations
are in early stages, with progress cited,
but without a specific timeframe. The
pact was initiated by New
Zealand Prime Minister
John Key on a recent trip to Beijing. On a national level, exports from New
Zealand to China
jumped 32% in 1Q2013, surpassing shipments
to Australia
for the first time. The main items
shipped were dairy products, raw lumber
(logs), and meat. The currency talks
are underway as New
Zealand has targeted
NZ$20 billion (=US$16.2 bn) in two-way
annual trade with China
by 2015, compared to NZ$15.2 billion
in the year ended March. Cost reduction
is direct. The transaction costs would
come down when doing business with China. It reduces the cost
of hedging as well as eliminating the
impact of currency moves in opposite
directions. It also enables competitive
pricing. These advantages were pointed
out by Jane Turner, economist at ASB
Bank in Auckland. See the Bloomberg article (CLICK HERE).

◄$$$ CHINA URGENTLY NEEDS A NEW
FINANCIAL SYSTEM. ITS LINKAGE TO THE
USDOLLAR SYSTEM A CHOKING INFLUENCE,
FROM THE DEBT AND TOXIC CURRENCY FOUNDATION.
EXCEPT FOR A HUGE SURPLUS AND MASSIVE
RESERVES, IT RESEMBLES THE UNITED STATES
AS AN EXTENSION. YET IT MUST DEPART
AND ADOPT A NEW VIABLE SYSTEM. $$$

Fitch has called the China credit bubble unprecedented
in modern world history. Well, they
overlook the United States, which is an
order of magnitude worse and far more
corrupt with grand war machine appendages
like a ball & chain. The Chinese
shadow banking system is out of control,
under mounting stress as borrowers struggle
to roll over short-term debts. The scale
of credit is extreme. Growth is inhibited.
The growth model based on credit engines
is falling apart. The risk is for massive
over-capacity to be realized. No transparency
exists in the shadow banking system,
and systemic risk is rising. The identity
of borrowers and lenders plagues the
system. The quality of assets is unknown.
Lending is effectively masked as
trusts, wealth management funds, offshore
vehicles, and other forms of irregular
lending make up over half of all new
credit. Bad assets are routinely off-loaded.
Exposure to property risk does not appear
as property on the bank accounting.
Concerns are rising after a string of
upsets in trust products, a $1.4 trillion
segment of the shadow banking system.
Fitch warned that wealth products
worth $2 trillion in loans are actually
a hidden second balance sheet for banks,
allowing them to circumvent loan curbs
and thus evade regulatory limitations.
This niche is the epicentre of risk.
Half the loans must be rolled over every
three months, and another quarter in
less than six months. The similarities
to Northern Rock, Lehman Brothers, and
other Western firms are stark, which
resulted in failures from short-term
liabilities when the wholesale capital
markets froze.

The Chinese banks do have over $3 trillion in reserves parked at the central
bank, giving them a massive savings
account that can be drawn down during
resolution of the credit crisis, once
it erupts in full bloom. Overall credit
has risen sharply from $9 trillion to
$23 trillion since the Lehman crisis
in late 2008 Amazingly, the entire US commercial banking system
has been replicated in five years. The
Chinese ratio of credit to GDP has jumped
by 75 percentage points to 200% of GDP.
During the same timespan, the US
ratio has risen about 40% versus GDP.
Extreme concern has hit China on its financial foundation.
It must reform, restructure, and adopt
a new system. The Gold Trade Standard
seems viable. It is coming soon. See
the UK Telegraph article (CLICK HERE).

##
GOLD EXCHANGE VACANT VAULTS

◄$$$ THE STUNNING DRAINAGE OF JPMORGAN GOLD IS A JOY TO WATCH. THEY ARE
PRONE AND BLEEDING AT THE MORGUE. AN
ACCELERATION OF GOLD BAR REMOVAL IN
HIGH GEAR FROM THE JPMORGAN VAULTS IS
IN PROGRESS, WHICH INCLUDES CLIENT ACCOUNTS.
THEY DISTRUST THE BANK, CLEARLY. PREPARE
TO CELEBRATE THE COMPLETE DRAINAGE OF
JPMORGAN. $$$

Among the many important COMEX participants, the biggest US
bank has been withdrawing enormous amounts
of gold from warehouses. JPMorguen stands
out among the rest, its behavior far
different, sticking out like a giant
festering thumb. The graph shows the
JPM discharge of gold bars between December
2012 and June 2013. Its fellow members
display no such similar drainage. Thanks
to the Real Asset folks for great charts.

The withdrawals are courtesy of both the JPMorgan House account and JPM Client
account. Their House account saw heavy
depletion in February, March, and April.
Their Client account saw heavy depletion
in the four months from April through
June, with growing volume. The suspicious
clients appear to have followed the
JPM lead in deed. March resulted in
2.3 metric tons in exit, while June
had grown to reach 4.7 metric tons in
exit. The trend is worsening, a
sign of vanishing trust by its own client
base, who frequently sue the big bank
in court. One intrepretation is that
JPMorgan clients have been handing over
gold in heavy volume in meeting delivery
needs for four months in a row. The
Jackass does not buy that story. It
is more like their clients have been
removing it from the greedy corrupt
clutches of JPM hands, removing it from
the JPM vault altogether for safe keeping.
The distrust of the JPM crime center
is becoming well known.

◄$$$ THE JMPORGUEN GOLD INVENTORY HAS GONE DANGEROUSLY LOW, HAVING DONE
A FAST VANISHING ACT. THE JUNE 11-th
REMOVAL WAS OVER 60% ON A SINGLE DAY.
ANOTHER COUPLE MONTHS WITH THIS PATTERN,
AND JPMORGUEN WILL BE OUT OF GOLD. $$$

Overnight withdrawals continue in relentless pace. Record low inventory has
gone hand in hand with rapid withdrawals
by distrusting parties. The JPMorguen
criminality is coming into full view
and wide recognition, with lawsuits
and court settlements frequent. More
demand for JPM vaulted gold is occurring
than the firm has in its possession.
Daily vault depository statistics released
by COMEX are the source of frequent
shocks, none greater than on June 11th.
The Morgue parted that day with another
28.4% of all of its vaulted gold, the
largest one day withdrawal since April
25th. The breakdown includes the departure
of 61.5% of its Eligible gold, an amount
equal to 218k troy oz. The total gold
held by JPM has fallen to a new record
low of just 550k ounces, down from 768k
the day before. Worse, hundreds of thousands
of registered gold ounces in the bast
few weeks have seen warrant detachment,
a prelude for removal. The run on the
JPM vault shows no sign of letting up.
At the current depletion rate, the world's
biggest gold vault, located in South Manhattan next to the Fed's own gold vault, will be empty in under
two months. It cannot happen soon enough.
Bury them and let the world move on.

The drainage is stunning. JPMorgan Client gold inventory
fell 61% overnight on June 11th alone. Their official Eligible (Customer)
gold inventory fell by a whopping 6.7
metric tons of gold taken off the listed
inventory. Only 136,380 ounces of gold
remains in the JPM official customer
inventory. A mere four metric tons of
gold is left in its Eligible Client
inventory. The 217,844 oz withdrawn
from the JPMorgan vault accounted for
28% of its total inventory, which means
JPMorgan only has approximately 555,000
oz left in its total inventory. The
figures require extra stress to reflect
the extra distress. See the Silver Doctors
article (CLICK HERE)
with a table.

◄$$$ HARVEY ORGAN PAINTED A
SHOCKING PICTURE FOR THE C.O.M.E.X.
AS BEING ALMOST OUT OF GOLD IN INVENTORY.
HIS INTEGRITY IS EXCELLENT. ANOTHER
EVENT IS COMING, AS THE BACKGROUND SCREAMS
FOR IT. $$$

The daily weblog of Harvey Organ is a rolling website on content (CLICK HERE).
A snapshot after trading on June 17th
paints a frightening picture. The Dealer
Inventory is extremely low for the three
major bullion banks at Scotia, HSBC, and JPMorgan. It totals 30.08 tons of gold bullion, in
no way adequate to meet delivery requirements
at the COMEX in the next few months.

d)Brinks dealer account has the biggest
share of the dealer gold at 445,398.58
oz, equal to 13.89 tons.

Organ has a keen ability to summarize well, pointing to the critical problems.
He states the problem as three-fold:

1)The total dealer inventory of gold
is at a very dangerously low level of
only 44.32 tons, and none of the 9.5
tons linked to delivery notices from
May and the 30 tons from June have been
removed from inventory yet. That leaves
under 5.0 tons after May and June are
processed.

2)part A: JPMorgan's customer inventory
remains extremely low at 136,380 oz.
Those customers of JPMorgan who have
gold in its vault might best remove
it before another fiasco like MFGlobal
occurs. They are forewarned.

3)Part B: JPMorgan's dealer account
rests at 413,000 oz. However, all of
this gold is committed, plus an additional
81,000 oz.

4)The three major bullion banks have
collectively only 30.08 tonnes of gold
left!!

◄$$$ THE AGGREGATE C.O.M.E.X. DATA IS SUSPECT, AS DISCLAIMERS OPEN THE
DOOR FOR BIG DOUBT, EVEN RIPE SUSPICION.
EXPOSURE OF THEIR FRAUDULENT DATA IS
COMING INTO THE OPEN. CLIENTS WHO HOLD
GOLD IN THE EXCHANGE RUN THE RISK OF
HAVING THEIR GOLD BARS REHYPOTHECATED.
EVEN CLIENTS WHO RECENTLY HAVE TAKEN
DELIVERY UNDER CONTRACT, BUT NOT TAKEN
POSSESSION, COULD HAVE THEIR GOLD BARS
SNATCHED UNDER THE SAME ROOF WHERE THEY
STORE IN THE C.O.M.E.X. VAULTS. $$$

The official disclaimer by the once venerable JPMorgan on the COMEX data speaks
volumes. "The information in
this account statement is taken from
sources believed to be reliable; however,
JPMorgan Chase & Co disclaims all
liability whatsoever with regard to
its accuracy or completeness. This account
statement is produced for information
purposes only." Sounds like
they are stating their data is a lie,
but a lie that absolves them from legal
liability. The attorneys for the
CME/Comex have covered their crooked
asses by adding the statement to their
daily gold and silver warehouse stock
reports. It is a new addition, which
did not recently appear on their warehouse
stock report a week before. So conclude
the COMEX data has been published as
false, with a legal rejoinder probably
included by legal counselors.

The COMEX vault operators lease out a substantial portion of the Gold &
Silver bars kept in both the Registered
and Eligible account designations. It
would be easy income for JPMorgan, a
bullion bank who actively engages in
gold leasing, to lease out the majority
of the bars it stores. After all, for
any given delivery month, less than
2% of the Open Interest ever stands
for delivery. Extra income would be
easy. The suspicion has been raised
that the disclaimer has suddenly appeared,
put on the warehouse reports, after
a large amount of gold bars have been
physically removed from COMEX vaults.
The attention should be drawn specifically
to the JPMorgan Eligible account, since
the beginning of the year. Therefore,
highly likely that a significant portion
of the remaining Gold & Silver sitting
in COMEX precious metals vaults has
been been hypothecated in some form,
used as collateral snatched easily.
The practice is surely illegal, if JPMorgan
clients were to read the fine print
of vault contracts. Precedent has been
set by MF-Global and the illegal hypothecation
of customer assets. The common link
is JPMorgan, the gigantic crime syndicate
bank which controls the legal processes
as well. They are moving from grabs
of previously sacred client brokerage
accounts to COMEX Client accounts. Later
come the run of the mill bank accounts.

To make matters even worse, no COMEX warehouse rules
require vault operators to establish
Allocated (separated, untouchable, owned)
accounts for the individual customers. They intentionally make no boundaries,
enabling thefts. This pertains to storage
and guarantee requirements. It is like
intermingling children college funds
with the household accounts for general
spending purposes. Those customers who
have taken delivery of Gold or Silver
bars from the COMEX under contract might
have chosen to safekeep them in the
same COMEX vault. They easily vanish.
To be sure, insurance is required. If
and when a rush occurs by vault customers
to take physical possession of their
owned gold bars, it is highly likely
not to be there any longer. A slip of
paper might be left behind, a notice
about the disclaimer. See the Truth
In Gold articles (CLICK HERE
and HERE).

◄$$$ SILVER STOCKS AT THE SHANGHAI EXCHANGE HAVE DECLINED SUBSTANTIALLY SINCE
THE APRIL PRICE TAKE-DOWN. THE CORRUPT
C.O.M.E.X. AND S.L.V. REPORT NO DECLINE
AT ALL, A GRAND LIE. A GLOBAL SILVER
SHORTAGE HAS ARRIVED. $$$

An interesting trend is taking place in the silver warehouse stocks at the Shanghai
Futures Exchange over the past two months.
The Exchange started trading silver
futures in May 2012. From the onset
until the beginning of 2013, silver
warehouse stocks grew from virtually
nothing to nearly 1000 metric tons.
In seven weeks, 357 metric tonnes of
silver have been removed from Shanghai
at the exchange, resulting in a 32%
decline of warehouse stocks. Either
industrial demand has picked up significantly,
or investors in China are capitalizing on
the lower price of silver. Given the
global economy is in decline, the conclusion
is simple. The Chinese are gobbling
up silver at discount prices. Notice
the silver inventories are declining
on the Shanghai Futures Exchange while
COMEX levels have remained about the
same (165 million oz) since the silver
price ambush in April. Again, the COMEX
data is a big ugly bold lie with disclaimers
attached. See the Silver Doctors article
(CLICK HERE).

◄$$$ SHANGHAI FUTURES EXCHANGE VOLUMES ARE SURGING, AS THEIR AFTER HOURS
TRADING WILL BEGIN THIS SUMMER. CONTRACT
TRADES IN GOLD & SILVER ARE TO TO
KICK OFF ON JULY FOURTH, TO MARK A CERTAIN
DEGREE OF INCREASED INDEPENDENCE
FOR THE GOLD MARKET GOING FORWARD. $$$

The Shanghai Futures Exchange (SHFE) will begin after-hours trading for its
Gold & Silver contracts on July
5th, as part of its efforts to become
a more global marketplace. The significance
of Independence Day (July Fourth) in
the United States is not lost. The SHFE is the country's
biggest commodity exchange by contract
value. Its contracts pertain to copper,
aluminium, zinc, lead, natural rubber,
fuel oil, and steel, in addition to
precious metals. It is also preparing
to launch contracts soon in crude oil
futures. The COMEX/LBMA death watch
continues. See the Reuters article (CLICK
HERE)

◄$$$ EXCEPT FOR INDIA AND HONG KONG, PREMIUMS REMAIN STRONG FOR
RETAIL GOLD SALES AS VOLUMES HAVE SURGED
ACROSS ASIA. SHORTAGES
ARE REPORTED ACROSS INDIA,
WHERE THE ENTIRE SUPPLY CHAIN IS IN
DELAY WHILE SMUGGLING ROUTES ARE BETTER
CREATED. $$$

Singapore, Shanghai, Dubai, and Turkey continue to see high premiums for gold sales
across Asia. On
the last day in May, the overnight volume
for the cash contract at the Shanghai
Gold Exchange surged 55% to 15.64 metric
tons, from a two-week low of 10.09 metric
tons on May 27th. That is very significant.
In Singapore,
gold coins and bars are being sold at
high premiums compared to the spot price,
admist shortage. Reuters quoted one
broker who said that most of the bullion
dealers in Singapore
were sold out of bullion, all customers
as buyers, no sellers. Price volatility
is not deterring physical buyers. Premiums
remain strong in most markets. In India, supply of gold coins
is seeing great shortages. Many states
have actually run out of gold coins.
In Hyderabad,
a city of nearly 7 million people, gold
and jewelry shops in the city have minimal
stocks of gold coins and bars. Some
shops have completely run out of stock
of the best selling gold coins. Delays
are common for replenishment of coin
supplies from banks and bullion brokers,
creating a delay in the entire supply
chain. The inside scoop is that smuggling
routes are being firmed, in response
to obstacles presented by the Indian
Govt. See the Silver Doctors article
(CLICK HERE).

◄$$$ THE HONG KONG MERCANTILE EXCHANGE WAS A CRIMINAL
FRONT AND STRUCTURED FINANCE VEHICLE.
MYSTERY SURROUNDS ITS SHUTDOWN, AS ARRESTS
HAVE BEEN MADE. THE EXCHANGE TO CEASE
TRADING, IT CLOSED OUT & CASH SETTLED
OPEN CONTRACTS MONDAY MAY 20TH. $$$

Recall that the HKMEx is the Rothschild baby, the work of a despicable vile
human carbon unit. Charges of document
falsification were lodged. The exchange
closed suddenly after being in operation
for only two years. It was expected
to become a dominant force in Asia. Apparently its founders ran aground with important people. Consider
the shutdown a watershed event. The
exchange had been ignored, as it shut
down amidst tiny volume traded. A mere
200 open contracts remaining to be settled
upon shutdown. The controversy deepened
when at least four HKMEx senior executive
were arrested, having been found to
be in possession of false bank documents
valued at $500 million in redemption.
The confiscated false documents included
an acknowledgment letter, two letters
of guarantee, and three proofs of funds
allegedly issued by HSBC and Standard
Chartered Bank, in addition to time
deposits and a telegraphic transfer.
A bizarre element owed to the fact that
the political head of Hong
Kong and the founder of the HKMEx were
very close. Beijing had a big hand in shutting down the elite control room.

The entire HKMEx was being used formally as a highly structured gold financing
vehicle. It is linked to China's Copper Financing
Deals. The Chinese authorities are in
the process of a major crackdown. After
the recent collapse in the price of
paper gold, suddenly the infinite rehypothection
chain tied to HKMEx found itself in
jeopardy, with margin funding pressure
forcing collateral chains to break.
Expect more revelations to the story,
with possible fireballs hurled at the
Rothschild castle. Before May had sunset,
the exchange ceased trading, all contracts
closed out in cash. See the Zero Hedge
article (CLICK HERE).
See also the South China Morning Post
article (CLICK HERE)
as a fifth arrest took place over more
false documents.

##
ALLOCATED GOLD ACCOUNT SCANDAL

◄$$$ MORE DIRECT TESTIMONY ON SWISS GOLD ACCOUNTS NOT BEING REDEEMED IN
GOLD. OBSTACLES ON REDEMPTION INCLUDE
A DISPLAY OF GOLD, BUT NOT BARS HANDED
OVER. LIMITS ARE ARBITRARILY IMPOSED
ON WITHDRAWAL, WHEN REDEMPTION IS PERMITTED.
THE SWISS BANKS DO NOT HAVE THE CLIENT
GOLD IN THEIR VAULTED POSSESSION, SINCE
LONG GONE. THE ALLOCATED GOLD SCANDAL
IS GATHERING TREMENDOUS MOMENTUM FROM
WIDENING EXPOSURE. THE GOLD BULLION
BANKING SYSTEM IS BEING EXPOSED FOR
ITS FRACTIONAL DEVICES, WITH 100 TIMES
AS MUCH PAPER GOLD AS METAL. $$$

Egon von Greyerz of Matterhorn Asst Mgmt has provided an update with more stunning
news regarding clients being refused
for redemption of their physical gold
out of Swiss banks. The gold shortage
intensifies. The bold crooks at the
Swiss firms actually showed account
statements denominated in ounces, when
they should show statements in bar counts,
whether in kilogram or ounce weights.
The same banks claim to abide by limited
withdrawals of arbitrary amounts, not
stipulated in any original contracts.
They are making it up as they go
along. The paper gold market is
heavily leveraged in a fractional banking
system that has broken down, in the
process of being exposed. The great
Allocated Gold Account scandal is slowly
erupting, as the Jackass forecasted
two years ago, as The Voice warned in
2011. He again is proved correct,
a safe voice of future events, echoed
by Egon at Matterhorn.
Von Greyerz said the following.

"At
our company we are hearing more and
more stories about banks not delivering
gold that belongs to the client. We
are talking about Swiss banks here once
again. One client went to a Swiss bank
to inspect his gold and the client manager
said, 'YOU CANNOT SEE IT, BUT IT LOOKS
LIKE THIS,' and he took a gold bar out
of his drawer. The client showed
me that he had a statement showing ounces
of gold. Well, you do not own physical
gold in ounces in Europe.
You own gold bars either in grams or
in kilos, but not in ounces. You know
automatically that it was paper gold
the client owned, because it was in
units of ounces from a European bank.
Another client went to a major Swiss
bank and he wanted to inspect his gold,
but the account manager said, 'I CAN
SHOW YOU THE DOCUMENTS, BUT WE ARE NOT
ALLOWED TO SHOW YOU THE PHYSICAL.' And
this was a major Swiss bank. Just today
we heard from a client that was going
to take his gold out of two major Swiss
banks. This bank told him that he could
only take out 200,000 Swiss francs worth
of gold per annum. They started off
by telling him 50,000 to 80,000 Swiss
francs of gold could be taken out, but
eventually they went up to 200,000.
The other bank told him that he could
not take out more than 80,000 Swiss
francs worth of gold per year.

So
clearly these banks do not have the
physical gold. If they do, it is very
strange they will not show it to clients,
and the clients are not allowed to take
it out of the bank. So it is clear that
many banks do not have the gold. The
bottom line is the banks do not have
enough physical gold to cover the commitment
to their clients, and governments also
have a lot less physical gold in the
West than they claim to have. As
the paper market is 100 times larger
than the physical market, it means that
paper market has virtually no physical
gold to back it. My message is very
clear: Investors must hold physical
gold outside of the banking system because
this paper market will explode one day." See the King World News interview (CLICK HERE
and HERE).

In another setting, Von Greyerz warned that in the West, the people with savings
and wealth do not comprehend that they
have lost 60% to 80% in real terms over
the last 13 years. Cash has lost 80%
value in real terms, as have stocks,
housing, commercial property, and many
other assets. People live under the
false illusion that paper money is a
true measure of their wealth. Nothing
could be further from the truth. It
is vapor.

◄$$$ EVERY METALS TRANSFER REQUEST FROM MAJOR BROKERS IS BEING REJECTED
MULTIPLE TIMES, ACCORDING TO A 20-YEAR
VETERAN METALS TRADER WITH MORGAN STANLEY.
CRUDE BRUTE OBSTRUCTIONS ARE BEING DEPLOYED.
THE BROKER WAS DISMISSED FROM HIS WALL STREET FIRM FOR HIGH EMPHASIS GIVEN TO GOLD IN OVERWEIGHT ON CLIENT
ACCOUNTS. ANOTHER ANOMALY TO EXPOSE.
WHEN GOLD BARS ARE MOVED, THEIR WEIGHTS
AND SERIAL NUMBER MARKINGS DO NOT MATCH.
THE BULLION BANKERS ARE SCRAMBLING TO
ACQUIRE GOLD BARS FOR REDEMPTION PURPOSES.
$$$

An anonymous Morgan Stanley broker has come forward to provide direct evidence
of the obstruction being used, as basic
as it is, and of anomalies in gold accounts.
He said, "I have been a broker
for 20 years. Recently the major
broker dealer I work for asked me and
my clients to leave due to too high
of a concentration in physical metals
[in their accounts]. I am now in
the process of moving my clients and
metals to a new custodian. Here is where
things get interesting. Every transfer
is being rejected multiple times for
the any reason the old major broker
dealer can come up with. More interesting
of all, when the old broker dealer finally
does transfer the metals to the new
custodian, none of the bars are the
same in weight or serial number as my
clients statements! The old broker
dealer is having to come to me and my
clients with bars of different serial
numbers and weight than the one listed
on the statements or from old trade
confirms. This mismatch on transfers
proves to me that the old broker deal
never had the metals and is now having
to go acquire them to make good on client
transfers. I am 100% certain that
most of the metals have been removed
from the United States, and when the
stock market and bond market crashes
this fall, all metals in private accounts
will either not be there, or be confiscated.
Heed this warning, people, the end is
here." See the Silver Doctors
article (CLICK HERE).

The Voice confirmed the mismatch evidence from his vantage point far away. He
wrote, "The mismatch of bar
numbers and delivery delays has been
the case for years, when trying to get
clients metal holdings removed from
Swiss banks. There are multi-$billion
law suits pending where there are no
deliveries at all. The banks are short
between 40,000 and 60,000 metric tons
of metal they sold to clients but physically
do not hold in their possession.
One of the biggest frauds ever, much
like all the paper investments people
hold." He has repeated his
warning on the Allocated Gold Account
fraud and scandal for two full years.
It has finally arrived!! The gold tonnage
volumes he refers to are of the same
magnitude as the total global central
bank holdings.

◄$$$ NO MORE GOLD IN THE ZURICH CANTONAL BANK OFFICIAL INVESTMENT ACCOUNTS
FOR GOLD. AT LEAST THEY DISCLOSE THEIR
FRAUD. THE EASY LESSON IS THAT LOW FEES
MEAN NO VAULT SERVICE AND NO INSURANCE,
THUS NO GOLD BARS IN POSSESSION. $$$

The client brochure received in the mail come from Zuger Kantonalbank. In the
section 8.1 Metallkonto, it reads "Uber
das Metallkonto ist es NEU moglich,
Gold, Silber, Platin und Palldium NICHT
PHYSISCH zu handeln." Excuse
the missing umlauts, which do not appear
properly. Roughly translated it means
"It is now no longer possible
to buy or sell physical Gold, Silver,
Platinum and Palladium using the Metals
Account." When clarification
was sought, the ZKB officials stated
that they will still buy and sell physical
precious metals over the counter, but
clients cannot hold the physical in
a metal account. Therefore conclude
that they no longer provide Allocated
Gold Accounts. Actually they never did,
although they called them such.

The fine print read by a Hat Trick Letter subscriber who went through the redemption
obstacles in 2010, informing the Jackass
at each step, indicated that the ZKB
had the right to redeem in cash, when
he did. The deception angered my client
greatly, since he was led to believe
for years by the bank that he owned
physical gold at the ZKB with right
to redeem in metal bars. The deceptive
ZKB require a fee of 0.2% per year paid
on a quarterly basis, which was assumed
to be for vault service and insurance.
A big reason why dullards and dimwits
invest today in unallocated gold accounts
like what the scummy ZKB offers is its
low fees. No vault storage fees or insurance,
which means no gold.

Swiss refiners are the largest and most established in the world. The dominate
in the supply chain. Big delays have
hit the industry, resulting in long
supply line waiting periods. Egon von
Greyerz of Matterhorn Asset Mgmt has
informed that Swiss gold refiners have
increased the delays to gold delivery
up to a stunning five weeks. The Swiss
refiners refine over 75% of the world's
gold supply, in producing bars and other
investment items. The shortages in supply
are noted at the USMint and numerous
other important markets in the world,
including India
and Turkey.
Egon tossed in a gem comment at the
end. "Silver will outperform
Gold. We will see the Gold/Silver ratio
going down from current levels to below
30, and maybe 20. So to talk about Silver
over $100 is just the beginning. As
an investment the move in Silver will
be spectacular going forward."
See the King World News article
(CLICK HERE).
Totally agreed by the Jackass on the
Silver price and ratio.

◄$$$ HEAVY G.L.D. FUND REDEMPTIONS ARE BULLISH FOR PHYSICAL GOLD AT THE
INDESCRIBABLY CORRUPT EXCHANGE TRADED
FUND. EVIDENCE FINALLY HAS ARRIVED FOR
CORRELATION WITH THE SHANGHAI GOLD PRICE PREMIUM. THE ARBITRAGE OF GOLD BETWEEN EAST AND
WEST IS ON, TO EVENTUALLY PASS ON GIGANTIC
VOLUMES. $$$

Huge redemptions and record recent outflows have occurred from the corrupt Gold
Exchange Traded fund known officially
as the SPDR Gold Shares, but known commonly
as the GLD Fund. The mainstream tilted
press prefers to call the trend negative
for gold, but with the shallowest of
justifications, and no analysis whatsover.
The net redemption of shares early in
year 2013 was likely to short the Gold
market, using GLD inventory, a common
easy trick for the big privileged US banks who have ready access
to the GLD bars, and simple loading
dock rights. One official reason might
make some sense except for its circular
logic. The other analytic reason with
a firm ground is the arbitrage opportunity
that drove market participants to redeem
shares of GLD, grabbing gold bars, exploiting
the higher Shanghai price in sales. Buy low in New
York, sell high in Shanghai. The Wall Street filthy paper merchants
explain that the GLD fund managers are
working to match supply and demand so
that the net asset value (NAV) of the
ETFund is in line with its price. But
if the big US
banks raid the fund's inventory to sell
into the market under suppression motives,
then the gold price would go to zero
faster than a dog eats his tail. The
argument holds no validity.

Notice how the recent wave of redemptions in the GLD
net flow graph below has occurred even
while the premium to NAV has been very
stable, hovering around 0% for most
of the year. The real explanation involves China,
and the arbitrage with the higher Shanghai
price. The arbitrage was cited as a
coming attraction and major upcoming
factor a few months ago in the Hat Trick
Letter.

Some analysts suspect that the Swiss bankers are using Wall Street bankers as
intermediary (collusive criminal agents)
banks to secure the gold bars at the
SPDR Trust. The Swiss banks are grotesquely
short of gold with which to meet customer
demand of their own golds on account,
not new orders. At the same time, physical
demand in Asia has been extremely strong this year. According to the World Gold
Council (WGC), Indian imports should
reach 230 to 400 tons in 2Q2013, a rise
over 200% annually. The supply must
come from somewhere, and the Swiss refiners
are way behind in meeting demand. Asian
customers are paying a premium over
the London Fix price in order to obtain
physical gold. The so-called Shanghai Premium has finally arrived on the radar,
as the Jackass fully expected. It is
defined as the difference between the
quoted official gold price derived from
London Fix that feeds the COMEX price,
versus the Shanghai Gold Exchange gold
price. In the last several months,
the Shanghai
price has been notably higher. Since
the beginning of the year, the Shanghai premium has been consistently positive,
reaching more than $50 per oz. That
is enough for profitable arbitrage.

Higher Asian demand for physical gold with its attendant higher Gold price creates
arbitrage opportunities for market participants
with privilege and access, including
transportation devices, for instance.
The bullion banks in New
York and London
happen to be the only ones able to redeem
GLD shares. The GLD inventory can be
easily picked over for its 1000 tons
which acts like a large physical gold
bank. It is often called the Bullion
Central Bank. According to the GLD prospectus,
the bullion banks can create or redeem
units at a cost of 10 basis points (0.10%)
per share. Even with transport and insurance
costs a clear arbitrage opportunity
for the bullion banks is presented.
The Shanghai premium is as large, available, and potentially profitable.
Given the intense global demand and
widespread shortages, it seems obvious
that the GLD inventory is raided as
part of the arbitrage process. No obstacles
exist, no laws prevent, and profit is
presented, therefore it is done. The
only impediment might be the knowledge
that draining New York to build China will alter the geopolitical balance of power.

Since 2005, a strong negative correlation between GLD flows and the Shanghai
Premium has appeared, at minus 53%.
Translate the Statistics Greek to
mean that large outflows (redemptions)
from the GLD are typically associated
with higher premiums in the Shanghai
gold market, the volume response being
around half the impetus after accounting
for different units. If calculated
for just the last 18 months, the correlation
would be more like minus 80% or more,
possibly even minus 90%, which is only
seen in scientific laboratories. The
norm for a very strong correlation in
a social science setting is 35% to 40%,
from years of Jackass experience in
marketing research. From 2001 to 2005,
the correlation between the USDollar
and Gold price was minus 80%, another
huge anomaly figure on the corrupt billboard.
Since the beginning of 2013, the two
series are moving in diametrically opposite
directions.

In conclusion, the evidence seems powerful and convincing that opportunity has
brought arbitrage profiteering. The
big US
banks might be moving from the USTBond
carry trade to the Gold Arbitrage Trade
in generating profits. The bond channel
has little opportunity remaining, especially
since bond yields are reversing. So
far, the arbitrage profits are surely
small by comparison to the years 2009
through 2013 in USTBond carry trade.
The lack of availability of physical
gold and massive dislocation between
the physical and paper gold markets
will propel the exploitation of the
Shanghai Gold Premium further. It will
tear apart the COMEX gold market and
contribute toward shutting it down from
vanished inventory. See the Zero Hedge
article (CLICK HERE),
as the Jackass once again is very grateful
and impressed for their intrepid unique
outstanding work. Zero Hedge has no
peer on depth and breadth of coverage.

◄$$$ HEDGE FUNDS HAVE BUILT THE BIGGEST SHORT POSITION IN PAPER GOLD EVER.
THE OPPORTUNITY
FOR EASIER PROFIT ON THE LONG SIDE OF
THE TABLE IS GRADUALLY PRESENTING ITSELF.
WATCH FOR A COUNTER-TREND RALLY IN GOLD,
EVEN IF BRIEF. $$$

Larger efforts are required to push the Gold price lower. With reduced profit
potential (even though corrupt to the
core), the more likely direction might
be up for the Gold price. Any catalyst
to trigger a short cover rally could
be deadly for the hedge funds responsible
for the outsized net short gold position
in COMEX futures. Wall Street has
a long history of wrecking hedge funds,
even exploiting them as clients. The
trigger might be a realization that
greater profit lies from switching sides
of the table, which fund managers are
very experienced in doing. It only requires
a few hedge funds to start the stampede.
If China were to announce more specifics on a Gold-backed
Yuan currency, or if China were to announce its true gigantic gold
reserve account, then a buffalo stampede
would crush the greedly hedge funds
after their herd-like behavior going
short in unison. The impact on the Gold
price would be parabolic, taking it
back to the $1600 to $1700 range quickly.
See the Zero Hedge article (CLICK HERE).

◄$$$ GOLD STILL GLEAMS FOR CHINA'S MININF FIRMS. THEY
HAVE TURNED TO ACQUISITIONS SO AS TO
LOCK UP GLOBAL SUPPLY. CHINA HAS BECOME A LEADING
FINANCIER TO NEW AUSTRALIAN MINES. STEPS
APPEAR TO SOLIDIFY THE COLONIZATION
OF THE NATION IN A COMMERCIAL SENSE.
THE USUAL EUROPEAN AND AMERICAN FINANCE
PARTNERS HAVE RETREATED, LEAVING A GAP
THAT CHINA HAS FILLED. $$$

Chinese companies are buying up numerous overseas gold mines in their quest
to become international giants. Growing
Chinese mining firms are taking advantage
of depressed company valuations, as
they increase gold reserves by acquiring
mines. Driven by strong domestic
demand for gold, the pursuit is on.
Obstacles are identified as mines not
for sale, mines with diminished reserves,
and mines located in politically unstable
countries. Many viable mining firms
have seen their valuations remain firm,
while others have come down like in
Canada, according to Kingwell. Deal activity has
declined since last year, but Chinese
gold miners continue to buy mines. A
recent deal saw the Chinese gold miner
Kingwell Group announcing plans to make
an offer for more than a 50% stake in
Brazilian Gold Corp, a Canadian mining
firm with a major project in northern
Brazil. The total vlue of deals launched by
Chinese companies this year (five complete
months) has reached $436 million, according
to Dealogic. The pace is less than
last year, when $2.9 billion in deals
were struck. In Canada, a total of $260 million worth of deals
have been struck. Many firms are reacting
to the decline in gold prices by selling
off assets. That is NOT progress, but
rather a defensive departure. Also,
keeping a low cost mine in operation
is foolish since it squanders the asset.

In May, Shandong Qixing Iron
Tower (listed
in Shenzhen) agreed to acquire the gold
assets from Stonewall Resources out
of Australia for $140 million.
State-owned Zijin Mining Group, China's
biggest gold producer by output, expects
to bid for three mines owned by Barrick
Gold in Western
Australia. In August 2012, Zijin acquired
more than a 50% stake in Australian
miner Norton Gold Fields. On its website,
the aggresive gold mining firm said
it wants to be an international leader
by 2020. The motive is to do it by acquisition
of supply. Demand in China
remains strong, bolstered by the April
market ambush by the paper mache artisans
of COMEX. The nation is the world's
largest consumer of the precious metal.
China's
gold demand rose 20% from a year earlier
in the three months ended March 31st,
according to the World Gold Council.
See the online Wall Street Journal article
(CLICK HERE).

China is fast becoming the lead financier
to new Australian mines. They have committed
over US$1.5 billion (A$1.55 billion)
to projects listed by Beijing for development. They wish to secure a diverse and
long-term supply of metals vital to
that Chinese industrial development,
as well as investment. The unique continent
of Australia
is morphing into a colony of sorts.
Traditional financiers for Australian
projects in Europe and the United
States have retreated
from the sector. The EU and US have
severe credit problems and have directed
attention internally during the gathering
implosion. Their stock markets have
been closed off as a capital source.
The Chinese network of development banks,
mining companies, and engineering groups
have taken up the slack. A recent deal
was announced by Rex Minerals, whereby
Chinese interests will facilitate US$550
million in debt funding for Hillside
copper project on South
Australia's Yorke
Peninsula. Total project costs are estimated
to be US$800 million for development.
See the Australian article (CLICK HERE).

◄$$$ A NEW LAUNCH OF A CHINESE EXCHANGE TRADED FUNDS IS IMMINENT. HUA-AN
AND GUOTAI ARE SET TO LAUNCH VERY SOON.
AFTER GAUGING THE DEMAND AND WINNING
APPROVAL, ONLY MINOR HURDLES REMAIN.
$$$

The HuaAn Asset Mgmt managers expect the Chinese Gold ETFund to raise up to
$489 million quickly. It will be one
of the first such Chinese Gold ETFunds.
After initial gauges, they measure the
market potential as huge. The fund's
portfolio manager Richard Xu said, "We
think we could raise about 2 to 3 billion
Yuan initially [~US$400 million]. We
have received positive responses from
institutional investors due to the lack
of access to the gold market on-shore
in China."
That amount would buy about 250,000
ounces per year. HuaAn has received
strong indications of interest from
brokerages and hedge funds in China, after receiving approval
from the China Securities Regulatory
Commission (CSRC). A study by Blackrock
showed recently that total global assets
in gold exchange traded products (ETPs)
shrank to $96.2 billion in May, down
32% from $141.2 billion at the end of
2012.

The CSRC also approved Guotai Asset Mgmt to launch a Gold ETFund. Guotai has
arranged for relationships with banks
and securities houses to sell the ETFund,
according to the marketing department
of Guotai in Shanghai.
HuaAn will start marketing its Gold
ETF this month and aims to launch the
product as soon as possible afterwards,
once certain minor hurdles are cleared.

◄$$$ RESERVE BANK OF INDIA NEARS PANIC IN ITS WAR
AGAINST GOLD. THE CENTRAL BANK HAS BANNED
GOLD IMPORTS WITH BANK CREDIT, NOW CASH
ONLY. THE INDIAN GOLD BILL FOR APRIL
AND MAY REACHED $15 BILLION. ROUGHLY
HALF THE TRADE DEFICIT IS ATTRIBUTED
TO GOLD IMPORTS. $$$

The falling Indian Rupee currency has caused a minor panic in New
Delhi. The Reserve Bank of India
has moved to ban the import of gold
by domestic consumers through bank credit,
and has made overseas purchase of the
precious metal possible only on a cash
basis. Nothing can stop Indian citizens
from purchasing gold products. The decision
will harm the retail jewelry trade,
but not stop it. It will lead to higher
smuggling into the country. The central
bank has barred gold importers from
using letters of credit from banks in
order to secure gold imports. The requirement
is 100% cash margin basis, thus a cash
& carry trade. India will adapt. See the
Economic Times article (CLICK HERE).
A nasty vicious cycle has emerged. Indians
use gold to protect against price inflation,
largely caused by a Rupee currency in
decline. The gold used as inflation
hedge is mostly imported, resulting
in still lower Rupee exchange rates.

In my opinion, the nation of India must initiate more gold
mine industry on the base hills of the
Himalayans. They have the capital. They
have the mine potential. They have the
engineering skill set. Doing so would
produce gold with local devoted currency,
avoid the import effect, and lead to
greater employment. My excellent contact
EuroRaj claimed such mining projects
would be impractical, but profit potential
always finds a practical path, this
time to the Himalayan foothills.

For the two months April and May, the cost of gold import purchases exceeded
$15 billion. The single month of May
trade saw a deficit for India of INR
1108, equal to US$19 billion. Hence
the gold import factor is staggering
huge, at 40% of the trade gap, and important
at a national level. See the Trading
Economics article (CLICK HERE) for trade
data. Expect more curbs on gold coin
sales by banks. The official Indian
Govt efforts appear to be futile. The
nation consumed more gold in May after
the massive price decline in April when
the ambush occurred. The world's largest
gold consumer remains India, which imported around
162 tons of gold in May, a rise from
142.5 tons in April. The Indians love
ornate gold jewelry, a tradition, not
just coins, bars, and biscuits. See
the Bullion
Street article (CLICK HERE).

◄$$$ THE INDIAN CENTRAL BANK HAS PROHIBITED SALES OF GOLD COINS BY BANKS
IN A DESPERATE SEEMINGLY GOOFY MOVE,
FOLLOWING AN SILLY IMPORT TAX. PERHAPS
NEXT IS A BAN ON WEDDINGS FOR THE NATION.
$$$

Indian people will not stop buying gold, including jewelry or coins. The physical
gold shortage is ongoing and worsening.
In the first week of June, the Indian
Govt imposed gold import duties between
6% and 8%. The purchases continued undeterred.
The Finance Minister Chidambaram
decided to escalate. The Reserve Bank
of India has advised banks against
selling gold coins to retail customers,
in an attempt to ease pressure on the
nation's bloated current account deficit.
Expect next a panicked, chaotic buying
scramble, in the words of Tyler Durden.
See the Zero Hedge article (CLICK HERE).
One must wonder if a ban on wedding
ceremonies with gifts will be the next
absurd rule.

◄$$$ NOT ONLY IS ABN-AMRO DENYING CLIENTS THE DELIVERY OF GOLD FROM ACCOUNTS,
BUT THE BANK IS SHRINKING INTO A SMALL
SHADOW OF ITS FORMER SELF. IT WILL HAVE
SOON ALMOST NO GLOBAL PRESENCE. IT DESERVES
SOME LEGAL REMEDY BY THE COURTS, FOR
ITS CONTRACT FRAUD. $$$

ABN Amro will gradually morph into a boutique bank, its days of a global bank
having faded. The Dutch bank peaked
in size at 108,000 employees in 2006.
It has been reduced with indignity to
a mere 24,225 employees, certain to
shrink further. The number of countries
with ABN Amro offices is down from 56
to only 23 countries, expected to shrink
below 20 countries before the end of
2013. More announcements have come in
May for additional paring of head count.
Amidst a struggle to keep sales going
for the corporate bonds and a 17% decline
in the most recent quarterly profits,
the Dutch Govt custodian announced a
further cut of 400 jobs. The state-owned
bank plans to eliminate positions in
its commercial and merchant banking
unit on top of an earlier announced
2350 job reductions. Their stock
has been de-listed from the stock market.
The humbling experience has a most recent
plank, in the nationalization or decimation
of all four major major Dutch banks,
Rabo, ING, ABN Amro, and SNS Reaal.
They will no longer operate in the global
space any longer, but rather serve the
local Dutch market. See the Bloomberg
article (CLICK HERE).
A death experience might await ABN Amro
after their gold contract fraud, which
deserved legal prosecution and investor
lawsuits.

##
GOLD PRICE IN SUSPENDED ANIMATION

◄$$$ MINE OUTPUT IN THE UNITED STATES AND CANADA
CANNOT KEEP PACE WITH THE SILVER COIN
DEMAND FROM THE NATIONAL MINTS. THE
MINT SALES FOR THE TWO IMPORTANT NATIONS
ACCOUNT FOR THE ENTIRE DOMESTIC SILVER
SUPPLY AND MORE, CREATING A LARGE DEFICIT.
MINE OUTPUT IS SET TO DECLINE FROM FALLING
PRICE AND NUMEROUS DISRUPTIONS. THE
INDUSTRY REQUIREMENTS APART FROM MINTING
BULLION COINS MUST COME FROM IMPORTS,
A STRAIN ON DEMAND. PRICE MUST ADJUST
CONSIDERABLY HIGHER TO BRING THE EQUATION
INTO EQUILIBRIUM, A CONCEPT BEYOND THE
GRASP OF HACK ECONOMISTS. $$$

The market always returns to fundamental factors that force price to respond
to imbalance between Supply versus Demand.
The US
and Canadian Silver mine output is totally
consumed by silver coin production at
the USMint and Royal Canadian Mint,
an astounding data point. A grand shortfall
is at work. One might wonder why such
a basic fact is never mentioned on the
financial news wires (propaganda) or
talking televised toots (soft porn marketing).
The press prefers to focus on false
price inflation claimed as tame, and
wrong interpretation of COMEX declines
in egregious manner.

Compare coin sales data to the mining statistics from these two countries. According
to the USGS in 2012, the United
States mined around
34 million ounces of silver, while Canada mined around 17 million ounces of silver.
Total is 51 moz silver. Next, extrapolate
US and Canadian coin sales from their
national mints to determine how many
ounces of silver will likely be sold
by the end of the year. Various methods
exist. The linear calculation is not
accurate since bullion sales are highly
seasonal in nature, not at all linear.

A better method is to compare sales year to date with a similarly strong year
of sales, then multiply the annual total
by the same ratio seen in the partial
realized year. Year-to-date US sales
are 21.7 million ounces of silver sold,
which is around 15% higher than the
second highest year-to-date sales for
this period, seen in 2011. It is fair
to expect the current pace to continue
through December. So augment the 2011
total of 39.8 moz silver sold by another
15% to arrive at a forecasted total.
The 2013 annual forecast of US silver
coin sales is thus 46 moz. Next Canada, where the growth has
been torrid. For all 2012, the Royal
Canadian Mint sold 18.1 million silver
maples. Extrapolate the first quarter
numbers out for the rest of 2013, based
on 65% higher sales in 1Q2013 versus
than first quarter 2012. The result
is an annual 2013 forecast of 30 moz
in Canadian silver coin sales. The
Canadian forecast is actually conservative,
since the month of April saw record
breaking sales in a surge. With 46 moz
in US and 30 moz in Canada, the total
2013 silver coin sales comes to a forecasted
76 moz. Neither nation has mine output
to cover its silver coin sales. Given
the mine output of 51 moz in year 2012,
the shortfall will be 25 million ounces
for silver coin production at the mints
alone!! Silver will have to be imported
to satisfy mint demand.

Mine production forecasts were based on 2012 USGS totals. Nothing stays the
same. The many primary silver miners
are struggling to produce silver economically
at current prices. The majority of
silver miners are already operating
at market prices below their all-in
production costs for silver. Look
for significant cost cutting and reductions
in exploration, thus in silver output.
The logical result is much lower silver
production for 2013 from production
cuts. The 25 million ounce silver deficit
for bullion coin production will be
much higher. Then consider the demand
is ramping up. The shortfall will be
enormous, a pressure point for the Silver
price.

Finally, consider that industrial demand will have no physical silver supply
at their avail. Their silver needs will
come from imports of silver. Expect
no help from silver scrap supplies,
which make up 25% of silver supply.
The lower silver price will cut into
the scrap supply coming to market, since
a deterrent. Considering the exceptionally
large short position that hedge funds
have taken in Silver, and all the ingredients
are present for an explosion in the
Silver price. Pay no attention to the
news wires and talking toots. They know
nothing. See the Seeking Alpha article
(CLICK HERE).

◄$$$ BULLION COIN DEMAND UNPRECEDENTED AT THE USMINT. $$$

Richard Peterson, acting director of the USMint, calls demand for Gold &
Silver coins unprecedented. Remove the
hype and propaganda and bias. The demand
level for coins is at very high levels
almost two months after the historical
price decline in April, regardless of
its corrupt roots. The USMint is buying
all the coins being produced by their
suppliers. It aint enough. See the Zero
Hedge article (CLICK HERE).

◄$$$ DECLINE ON THE SILVER SUPPLY SIDE WILL TURN ACUTE AND NASTY, FOR
A BIG SURPRISE TO THE MARKET ALREADY
IN SHORTAGE. THE DYNAMICS ARE PRESENT
FOR A HUGE UPSIDE SILVER PRICE MOVE.
$$$

Mexico Mike pitched in with some good insights. The lower price is having a
direct business effect on project management
by the mining firms. He wrote, "New
mine supply is a big part of the story.
For sure actual Silver production has
increased significantly during the last
few years as the price was rising. However,
think of how many large projects have
gone offline in the last year, or been
significantly delayed. This week
Kinross announced that Fruta Del Norte
would not be developed. Barrick Gold
is having major issues with Pascua Lama.
There are many other projects large
and small that are held up right now.
You can expect this trend is going to
limit the total supply story for silver
in the years ahead. Now it is true that
the reported shortages of small bar
bullion are not necessarily an indication
that the market is in default. However,
there is enough smoke billowing from
various sources to have me thinking
there is a fire somewhere. At the end
of the day, we know that more Silver
is dumped in paper contracts than can
be delivered from worldwide supply.
Just add up the total trading volume
from the COMEX to see that some days
a billion ounces of silver leverage
may trade, in a market where world supply
is less than that for an entire year."
An explosive upside move in the Silver
price is coming. The dynamics are all
there, huge rising demand, with supply
in decline.

◄$$$ SHANGHAI WILL SLASH GOLD & SILVER MARGIN NEARLY IN HALF! THE RECENT
GOLD AMBUSH IS LIKELY TO CUT GOLD PRODUCTION
BY 10% OR MORE, AS FIRMS FACE A HOST
OF CHALLENGES. GIVEN THE BIG PROPERTY
SNAFUS, EXPECT A 20% DECLINE ON A GLOBAL
BASIS. DEMAND CONTINUES WHILE SUPPLY
WILL ENTER DECLINE. THE BANKERS ARE
SO SCREWED!! $$$

In the first week of June, the Shanghai Futures Exchange announced a surprise
cut its Gold & Silver margin requirements.
It goes directly against the corrupt
COMEX, which abuses margin to manage
the price suppression. The Chinese
bourse will reduce margin requirements
for the precious metals futures contract
to 4% from 7%. The change will go into
effect on June 25th. Global demand
has been a house afire since the illicit
paper ambush in mid-April. On the other
side of the price equation, the supply
of gold from mine output should decline
substantially. The factors are aligned
in several negative ways for mining
firms. When prices plunged in the
2007 to 2008 period, gold production
fell by 9.4% globally. The present conditions
for mining firms are much worse today.
Expect gold production to fall by 20%
this time around in a shocker that will
NOT be expected.

Balance sheets across the gold mining sector are much worse than five years
ago. Production cutbacks from the major
producers are being announced, from
simple economics of closing down unprofitable
mine projects. These factors are at
work to reduce mine output, apart from
worker strikes, mine accidents, legal
challenges on ownership, and nationalization
by grubby governments. The Gold metal
price will be supported on a long-term
basis by the supply cutbacks, as shortages
will remain acute. The global demand
will continue as long as central banks
wreck the currencies via debasement
and wreck the economies from cost increase
indirect responses. No stimulus exists
anywhere, not from monetary policy and
surely not from austerity programs.
The pressure is staggering for the Gold
price to rise, corrupt market or not.
See the Silver Doctors article (CLICK
HERE).

◄$$$ VIETNAM GOLD PREMIUM REACHED
$217 PER OUNCE ON JUNE 17TH. THE ASIANS
KNOW WHAT MONEY IS, AND IT AINT ON PRINTED
PAPER WITH GUARANTEES. CRISES HAVE HIT
VIETNAM SUDDENLY IN THE STOCK
MARKET, THE PROPERTY MARKET, ALONGSIDE
TOUGH CURRENCY DEVALUATIONS. $$$

The Vietnam Central Bank sold another 25,700 taels (1 tael = 37.5 grams or 1.2
troy ounces) equal to 38,400 oz at a
gold bar auction on June 14th. The auction
was intended to satisfy the enormous
public demand for gold in Vietnam.
The stated goal is to bring down high
premiums paid by gold buyers in the
nation. An odd fact is that Vietnam,
the largest buyer of gold in Southeast
Asia after Thailand, is perhaps the largest physical buyers
of gold per capita in the world. The
nation knows all too well the ravages
of war, inflation, and currency depreciation.
Recent months have seen a bust of their
stock market and a bust of their property
market, along with the continuing devaluation
of the Dong currency. Hence the record
gold demand in Vietnam,
pushing a fast rise in the gold premium
price over spot. On June 17th, the premium
was about 5.5 million Dong, equal to
$217 per ounce over spot. See the Gold
Core article (CLICK HERE).
A previous auction at the Vietnam Central
Bank registered a $150/oz premium paid
almost a month ago. The auction was
fully subscribed. The pattern is clear
over time. See the Economic Times article
(CLICK HERE).

◄$$$ ANOTHER BIG MINE SHUTDOWN, AT THE LARGEST IN THE WORLD. GRASBERG
IN INDONESIA WAS TO REMAIN CLOSED FOR THREE MONTHS.
A WHOPPING ONE MILLION OUNCES IN GOLD
OUTPUT IS HALTED. THE TIMING OF THE
GRASBERG SHUTDOWN IS HORRIBLE, GIVEN
THE HUGE GLOBAL GOLD DEMAND. $$$

The catalyst is elusive to trigger a Gold market stamped. Sentiment is deeply
negative. Nothing stops the slide in
the corrupt gold market, the price appearing
unaffected by unprecedented demand and
widespread shortage, both on a global
basis. Enter a new factor to harm gold
mine output. In Indonesia,
the world's biggest gold mine has been
shut down for safety reasons linked
to collapsing walls. The shutdown will
be for an extended period after a string
of incidents that have befallen a weary
work force. The largest gold mine
in the world is the Grasberg mine, operated
by Freeport McMoRan
Copper & Gold located in Indonesia.
This monster mine project site has averaged
over one million ounces of annual gold
production over the last three years.
The great volume will go offline.
The firm claims it contains the world's
largest gold reserves. Unfortunately,Grasberg
has hit a number of setbacks. In May
a tunnel collapsed, trapping workers.
The government responded by shutting
down the entire facility while safety
inspections were conducted. Only the
open pit mine resumed operations later.
After an interior wall collapsed on
May 31st, the local mining ministry
ordered the shutdown of all operations
at Grasberg for at least three months,
while the accidents are investigated
and safety precautions are taken.

The zinger element is unhappy workers and ongoing contract negotiations. If
a strike ensues, then production may
be halted for much longer. Then comes
the nasty potential for the Indonesian
Govt to consider nationalization, since
the mine could represent an entire central
bank. See the Seeking Alpha article
(CLICK HERE)
and the Mining Business article (CLICK
HERE).
Bear in mind that the Pascua Lama mine
in Argentina and the Kennecott mine in Utah USA are
both cutting deeply into the global
mine supply line, since their shutdown
also.

If it is not violence that results in worker deaths at the hands of mining firm
security, or hostile government confiscation
of property in the resource nationalism,
or legal challenges for ore deposit
property ownership, it is wall cave-ins
and safety concerns. Many are the disruptions
to mine output and the grand supply
line for the Gold & Silver market.
The Jackass remains steadfast in preferring
the metal over the mining shares, mere
paper in a world of collapsing walls
of paper wealth. One more story, great
for the metal price, bad for the mining
stocks. Grasberg represents a lot of
gold supply vanishing. Thanks to Fabrice
for the story, as he added adroitly
"A big risk exists for nationalization
of the mines, which makes sense if Gold
goes right back at the center of the
monetary system." Central banks
will not permit foreign mining in their
countries in a Gold Standard new world.
They will not allow foreign interests
to own the natural supply channel to
the central banks vaults.

◄$$$ DEMAND FOR PHYSICAL METAL IS EXTRAORDINARY. IF NOT THE STRONG DEMAND,
THEN THE THREAT TO BANK ACCOUNTS WILL
LIFT THE GOLD PRICE. $$$

Gold expert James Turk and founder of GoldMoney is not worried about the recent
sell-off in the deeply corrupt COMEX,
which purports to be a precious metals
market. It is more a gathering of corrupt
contract fraud kings, with black ink
that bears the same letters as gold.
Turk is supremely confident of a much
higher Gold & Silver price in the
coming months. He adds how banks will
undermine citizen confidence, as depositors
depart the corrupt banking system, later
to seek true safety. Turk said, "At
this level, we have probably gone as
low as we possibly can. The paper traders
and the derivative traders have pushed
it about as far as they can, but the
demand for physical metal is extraordinary
down here at these levels. Within 12
months, Gold is going to make a new
record high over $2000 an ounce, and
Silver is going to double. It could
happen sooner depending on how events
unfold. It is inevitable you are going
to see bail-ins [from bank failures]
as we go forward from here, because
the capital just does not exist. The
problems we have been confronting the
past several years have not gone away.
Governments have been trying to buy
time, but they are not coming up with
any solutions." See the Before
Its News article (CLICK HERE)
which includes a video interview. It
has been a constant Jackass point made
that the bankers are not even attempting
to bring solutions to the table. They
work to preserve power, to tap into
government largesse, and to redeem their
toxic bonds. The bankers will not liquidate
the problem banks, where their power
lies and their syndicate manages the
whirligig.

##
EUROPEAN DESPAIR & DESPERATION

◄$$$ GERMANY HAS DONE A COMPLETE
REVERSAL IN PROMOTING STIMULUS, NO MORE
AUSTERITY. TOTAL WASTE OF TIME, MONEY,
HOPE. AT LEAST THEY RECOGNIZE AUSTERITY
IS A SCUTTLE POLICY, NOT A RECOVERY
PLAN. DESPERATION TO AVOID SOUTHERN
EUROPEAN DEBT DEFAULT LOSSES BY GERMAN
BANKS IS THE MOTIVE. EXPECT NO SUCCESS.
GERMANY MUST LOOK EAST FOR THE FUTURE. $$$

Austerity is finally being recognized for the Poison Pill that it is. Great
cutbacks in spending should only accompany
sweeping programs to liquidate the big
insolvent banks in a grand restructure
that includes tax reform and social
network reform. Budget cutbacks are
a perfect way to pull the plug on the
entire economy, since they accelerate
the recession and add job cuts while
reducing projects as well as pork. They
bring hardship, deprivation, and unemployment,
along with greater deficits. Poison
pills also put a damper on national
spirit, even push the youth into a mindset
of hopelessness. The German Govt
did an about face, a complete reversal,
with a gamble on stimulus. It will accomplish
nothing, only delay the inevitable,
since not part of any comprehensive
meaningful restructure initiative.
The death of Deutsche Bank will come,
but it will happen from implosion, not
planned restructure.

The German Govt has backed off its austerity mandates, instead to spend billions
to stimulate ailing economies in Southern
European. Consider it a last ditch failure
venture. Saving the Euro is not possible.
Some delusions persist that the dead
banks to the South can be kept on life
support, and thus spare Germany
of debt default losses. So the rotten
tables to the South, with their hollowed
banks and tattered industries will receive
some blood transfusions, all for naught
in a worthless exercise steeped in delusion
and desperation. Merkel and Schauble
can hold their heads high as the ship
sinks and real hope lies to the East
with stronger commercial and trade system
ties. Call it a new way of thinking
in the German capital, but too little,
too late, wrong focus, and wrong blueprint
manual. See the Spiegel article (CLICK
HERE).

◄$$$ GERMAN UNEMPLOYMENT INCREASED FOUR TIMES MORE THAN FORECAST IN MAY.
BUSINESS CONFIDENCE HANGS ON, BUT DESPAIR
AMONG THE FERTILE YOUTH. THE ABSENCE
OF JOB OPPORTUNITY
COULD LEAD TO YOUTH VIOLENCE, SEEKING
CHANGE RAPIDLY. $$$

German unemployment rose more than four times more than economists forecasted
in May, as the EuroZone sovereign debt
rot crisis and economic collapse continue
untreated. The number of people out
of work climbed a seasonally adjusted
21,000 to 2.96 million, as per the Federal
Labor Agency. It was the fourth straight
monthly rise, against 5000 net job losses
predicted by domestic economists. The
adjusted jobless rate held at 6.9%,
but surely they do not count all discouraged
workers. The German GDP grew by 0.1%
in 1Q2013, after a 0.7% decline in the
final quarter of 2012. The entire EuroZone
remains mired in recession, dragging
the Germany powerhouse down. Still,
business confidence rose this month
for the first time since February. See
the Bloomberg article (CLICK HERE).

◄$$$ AUSTERITY AND YOUTH IN EUROPE MIGHT CREATE THE CONDITIONS FOR A REBELLION. LEADERS HAVE NOTICED
THE PROBLEM, WITH JOBLESS YOUNGER CLASS,
LITTLE HOPE, AND COMMON STREET RALLIES. THE LEADERSHIP CREW IS
VERY WORRIED. BANKER WELFARE HAS REAPED
ROTTEN FRUIT. SOCIALISM DOES NOT WORK
(LITERALLY). $$$

German Finance Minister Schaeuble warned publicly that
unless Europe wins the battle against
youth unemployment, revolution is a
distinct possibility. It was a bold statement, on the minds of several leaders in several countries.
The dreaded thought arose as some corners
push to reform German welfare standards.
Schaeuble told a conference that if
US welfare standards were enacted in
the EU, the revolution would start the
same day. He called it completely untenable
to adopt such a set of rules, due to
system shock. Youth unemployment
stands now across the EU at 25%, double
the rate of older citizens. The
EU nations such as Germany, Italy,
and France
support urgent action to tackle the
issue before it becomes even more systemic
and dangerous a problem. Anecdotes out
of Spain report college graduates turning 30 years
of age without ever holding a job. Labor
ministers in Italy claim that
they have the best educated generation
but policies have put their future on
hold. The problem and its social spillover
has extended north to Sweden, which has suffered riots in Stockholm.

The ultimate problem is still not recognized. The solutions to the problem are
not accepted, bank liquidation, tax
reform, social network overhaul, amidst
grand restructure. The central banks
desire to continue the QE policies have
failed to generate any real job growth,
since only a stop gap for banker welfare.
Some analysts postulate that the grandiose
monetary stimulus could have supplied
the entire population for a $50,000
annual salary for ten full years instead.
Financial sector buttresses alongside
systemic unemployment seem like a tragic
contrast that invites social uprising.
Socialism does not work, literally,
since managed disintegration. Combine
with banker welfare, and the system
implodes, as seen.

◄$$$ SPAIN IS GOING TO THE SHITTER
WITH QUICKLY ACCELERATING DEFICITS.
THE FAILURE OF AUSTERITY IS IN FULL
VIEW. NO SOLUTIONS ATTEMPTED. IMPLOSION
IN HIGH GEAR. $$$

The implosion from untreated deterioration continues across Europe.
The crash is most evident in Spain.
Its beleaguered central bank reported
the nation's debt jumped to a record
88.2% of GDP in 1Q2013. The annual rise
in debt was the fastest on record. Spain's debt was EUR 922.8
billion at the end of March, up 19.1%
from a year earlier. The debt ratio
grows worse by the quarter. No solutions
attempted, sure not from austerity,
as the preference by Spain
has been to delay proper financial sector
accounting like ostriches with heads
in the sand for several years. The jobless
rate is at 27.2% after a fourth year
of recession. The debt-to-GDP ratio
in the last five years has doubled.
Expect the financial sector to continue
with bank failures for a couple more
years, as the property bust and its
resolution will drag on endlessly. See
the Zero Hedge article (CLICK HERE)
and the Global Economics article (CLICK
HERE).
See also the excellent report by Dansk
Research (CLICK HERE).

Spain is the most visible proof of the
failure to apply a single real solution.
By the way as footnote, the US
debt ratio is worse, having surpassed
the magic 100% line. The US is Spain
times six in population, but even more
lethal since the New York banks share the load in holding up the Western banking system.
Refer to a sense pertaining to vaporous
bank derivatives, but also in the standard
criminal hold-up (robbery scene).

◄$$$ JOSEPH STIGLITZ BELIEVES EUROPE HAS COMMITTED
SUICIDE WITH MONETARY AND POLITICAL
POLICIES. THE ENTIRE PATH IS DESTRUCTIVE.
THE CENTRAL BANK MINDSET IS ERRANT AND
FLAWED. NO CREATIVE DESTRUCTION IS VISIBLE,
ONLY DEEP DETERIORATION WITH A CRIMINAL
ELEMENT AT WORK. $$$

Joseph Stiglitz was awarded the Nobel Prize in Economic Sciences in 2001. Talking
of the European Union austerity plans,
Stiglitz in 2012 had just one thing
to say: suicide pact. Full agreement
with the Jackass then and now. He
expected, and voiced his concern, that
imposing austerity on the nations of
the EU would do nothing more than lead
to the collapse of their economies.
Nobody listened to him then, and nobody
is listening to him now. Politicians
today in the EU are determined to retain
power, just like in the United
States. The entire
system is at risk, since political decisions
will lead to the downfall of the economic
structures. Nations are governed by
leaders overly influenced by flawed
economic theory, and by people who have
no concept of what economics is. The
leaders and their masters are accomplished
only at retaining power, the power to
make policy, the power to control money,
the power to influence law enforcement.

Witness the failure of applying the Keynesian Economic
school of thought. He advocated austerity
to be put into place when the economy
is in the strong upswing, not downswing. To cut spending in unison across
nations can only bring about the paradox
of thrift, but with broad accelerated
decline as the outcome. But wrecking
the system might be the true underlying
motive, for imposing a great fascist
state, with Greenspan a main architect.
The words are empty on exporting our
way out of recession, when the key industries
were outsourced to Asia
over three decades. The initiatives
for currency devaluation are as errant
as they are destructive, robbing Peter
to enrich Paul. The technology has been
abused, having created bank derivatives
and employing kooky risk off-load schemes.
The West is led by corrupt bankers,
ignorant politicians, and their sorcerer
apprentices dressed in economist clothing.
See the Zero Hedge article (CLICK HERE).

Central bankers still dont comprehend the depth and nature
of the problem, which is insolvency
and not liquidity. The zero bound interest rate does
not work, since it distorts all asset
prices by altering the cost of money
as free. The bond monetization does
not work, since it undermines the currency,
causes the cost structure to rise, and
imposes a moral hazard whereby a bond
black hole is created with a carry trade
appendage. The boom and bust cycle is
a sign of failure, not a natural course
of events, due to malinvestment and
credit saturation. The tremendous growth
in money supply is not the saving feature,
but the spread of poison gas to the
system with a Weimar
label. This is not creative destruction,
but rather corrupt distorted predatory
destruction on the road to profound
perdition. See the Zero Hedge article
(CLICK HERE).
Ironically, the United
States is in the
process of rejecting austerity. Hence
its collapse will be slower than in
Europe.

##
UGLY USECONOMY SNAPSHOT

◄$$$ CLEAR SIGNALS THAT THE USECONOMY IS ABOUT TO SLOW DOWN IN A BIG DOWNGEAR.
THE MAJOR EMPLOYERS ARE CUTTING JOBS.
MANY US-CITIES ARE A BASKET CASE, WITH
DETROIT NOT ALONE. $$$

Michael Snyder provided 12 clear signals that the USEconomy is not just in recession,
but in the process of slowing down much
more rapidly. They include low mortgage
rates without public participation in
any recovery, lower mortgage application
volume, and mass layoffs at three large
mortgage institutions. Refinanced mortgage
applicagtions are down 65% to 90% in
the past three weeks of May. Average
hourly wages took a plummet in the first
quarter of 2013. The ISM manufacturing
index declined to 49.0 in May, below
the magic 50 line, the first indication
of contraction in a few years. Note
the first pullback in manufacturing
activity in the US seen since 2009. The factory
inventory/sales ratio has hit the lowest
level seen since 2009. So a lot
of inventory just sits, not bought.
The demand for computers dropped by
a stunning 9% during the month of April,
far more than any i-Pad effect. Corporate
revenues are falling at Wal-Mart, Proctor
& Gamble, Starbucks, AT&T, Safeway,
American Express, and IBM. Job growth
at small businesses is half the level
versus the beginning of the year. World
stock markets are in a tizzy. See the
Zero Hedge article (CLICK HERE).

The bad news came from IBM, Caterpillar, Chrysler, and even the city of Detroit. The computer industry giant plans to lay off 6000 to 8000
workers worldwide. The big CAT will
lay off one third of its workers in
Wisconsin.
They mentioned lower machine orders
from mining customers, a further confirmation
that mine output will enter a pronounced
decline in 2013. More pressure on
the Gold & Silver prices. Chrysler
plans to freeze pensions for 8000 salaried
employees in an effort to limit future
liability. Lastly, some of Detroit's
creditors are being formally petitioned
to accept pennies on the dollar in debt
payoff in restructure. The proposal
includes an offer that amounts to less
than 10 cents on the dollar on some
of the city's unmet debt obligations.

◄$$$ JOB LAYOFFS ARE RISING FAST AND FURIOUS, AS SEQUESTERED FEDERAL SPENDING
CUTS HAVE BEGUN TO HIT MAIN STREET.
$$$

The USGovt does not know how to cut jobs with fiscal prudence. But they do have
the newfound ability to furlough workers
without pay. Close to a million federal
employees have been told that they will
be given unpaid furloughs for several
days this year, the total actually having
taken them so far being quite low. Aggregate
government worker income should decline
in May, given that furloughs started
late in the month. The first day of
official nationwide furloughs was May
24th, when 115,000 federal workers,
equal to 5% of the total federal work
force, stayed home without income. The
majority of the furloughs will kick
in at the start of July, including 680,000
furloughs at the Pentagon (Pentagram)
beginning July 8th. The real income
shock will not show up until the July
personal income and outlay report on
the following month. See the Zero Hedge
article (CLICK HERE).

◄$$$ THE WAREHOUSE NICHE BUSINESS IS SUFFERING AT OVER-CAPACITY IN CALIFORNIA. EVIDENCE OF VASTLY REDUCED SHIPPING COMMERCE. $$$

Anecdote from DonZ of Florida, with ties to California.
"Last week, I visited Los Angeles to see my grandchildren. I stayed at
the Hotel Angelino in my son's neighborhood.
At the pool, I met a realtor from the
Oakland
Bay area chortling
about the strength of his local real
estate market. Later I shared my view
of a Treasury Bond bubble top and its
consequences. He told me that he was
handling a listing for the cargo
warehouse manager for the Port of Oakland. The manager's job was space
allocation for stored cargo. He was
downsizing now because the warehouses
are empty, totally. The manager
thought No Demand. In turn, my thought
was of no USDollar acceptance for trade.
Either way, it corresponds to the Baltic
Dry Index. This must be happening quietly
all across our nation's ports. Big implications!"

◄$$$ HOUSING PRICES ARE BEING DEEPLY DISTORTED BY WALL
STREET AND BIG INSTITUTIONAL MONEY.
THE POWERFUL MOVEMENT FOR CONCEALED
ELITE COMMANDEERING OF THE HOUSING MARKET
WITH USGOVT COLLUSION HAS BEGUN. HEDGE
FUNDS AND PRIVATE EQUITY FUNDS ARE ENTERING
THE MARKET AS CARPETBAGGERS. THE NEW
MASTER LANDLORD WILL BE WALL
STREET FIRMS AND THEIR FAVORED SONS
AMONG THE HEDGE FUNDS. THIS AINT FANNIE
MAE RENTALS, BUT THE UPPER MEZZANINE.
CONSIDER IT A GRAND FASCIST RESIDENTIAL
PROPERTY INITIATIVE, FOREWARNED BY THE
HAT TRICK LETTER A FEW YEARS AGO. $$$

Big institutional money is seeking rental income and future capital gains. They
are slowly gobbling up distressed property
held by the millions on the bank balance
sheets. A new elite landlord class
is coming, straight from Wall Street
and major private equity fund offices.
The Wall Street institutional buyers
are behind the scattered home price
recoveries in certain key markets.
The March Market Pulse report from CoreLogic
examined the rise of institutional investors
and the effects they are having on distressed
inventory. Their analysis found 16 major
US housing markets burdened
chronically by huge bank owned inventory
(REOs), most in rebound. The market
was not led by individual families,
but rather by institutional investors,
defined as entities that have purchased
at least five properties per year under
the same name or under an incorporated
name. So Fannie Mae marries Private
Equity to make a powerful national landlord
in the New Collectivist United Socialist
States of Amerrka. It aint progress
unless the march to feudal fascism
is celebrated.

The conclusion was that institutional investors have been targeting specific
markets and then accelerating purchases
of REOs in those markets, driving down
distressed inventories. Some effect
has been seen in firmer REO home prices,
and thus overall market upticks. Such
organized investors have focused buying
efforts strongly on Southern and Southwestern
cities that were hit hardest by the
foreclosure crisis. The states favored
are Florida, Georgia,
Arizona, Nevada,
and California.
The cities favored include Atlanta,
Detroit, Las Vegas, Phoenix, Sacramento, and Riverside CA. The home price
impact in cities without institutional
buyers is less than half, 15% versus
6%. The metropolitan area that welcomed
the most institutional activity in 2012
was Miami
Florida, where firms are funding 30% of all sales. They accounted for
21% of all sales in Charlotte NC, for
19% in Las Vegas, and for 18% in Orlando FL. One could
conclude that the housing market is
stabilizing, and finding support. But
the reason why is extremely disturbing.
It is from the elite firms that
caused the bust entering as carpetbaggers,
to become the landlord for a significant
slice of the national housing stock.
Only in America can the biggest banks
steal home equity, then become the landlord
in a new feudal system.

Hedge funds and Private Equity Funds are the dominant
buyer, who establish the price. Oftentimes,
they crowd our first-time buyers from
the housing market. Thus the distrubing trend, in elite landlord creation. The USGovt has its sponsored
internal agency in Fannie Mae, which
is working closely with the elite funds
in tight Wall Street collusion. They
are buying up huge numbers of single
family houses, bidding at full price,
crowding out the newly formed families
(couples) seeking entry level homes.
Wall Street wants to convert them into
rental homes. One must wonder if
the waves of Chinese will be the tenants.
Take Jonathan Shidler, a realtor in
California.
He receives at least one phone call
every day from a hedge fund manager
who wants to buy single family houses,
not a few but rather in bulk. The batches
are being acquired like a financial
instruments. Sometimes they come with
residents, clearly in serious arrears
on loan payments. A great emphasis
is made on acquiring the homes from
the bank inventory in the state of California. The brokers confide that when bids
stream in, the institutional investor
almost always wins.

Case in point is Blackstone, which is very activing making
purchases in the Atlanta
area. They have bought 1400 properties
in Atlanta,
some eligible for federal low income
housing subsidies. They are the largest bulk purchaser
within the new fledgling industry, homes
for lease. The private equity firm has
spent $4 billion on snagging 24,000
rental properties in the last year,
permitting it the distinction of being
the largest buyer in the United
States. In the
past twelve months, Blackstone has raised
over $8 billion to buy up medium priced
and low priced housing. The infamous
criminal syndicate has a division also,
as JPMorgan has started a fund to buy
up to 5000 homes. Morgan Stanley has
raised $1 billion to buy up to 10,000
homes. See the Before Its News article
(CLICK HERE)
and supporting articles (CLICK HERE
and HERE).